Running Up The Tab

If the economic prescription Bill Clinton outlined in his speech to Congress last week works, the benefits for sports, and for society in general, will be enormous. There is no denying the grandness of the President's vision, which includes a call for sacrifice in the form of higher taxes (many) and government spending cuts (some), a package of highway-construction and infrastructure improvements to create jobs, and a reduction in the federal deficit that is meant to bolster the economy and make more attainable such other goals as safer streets and a cleaner environment. And the stronger the economy, the stronger sports should be. That's because jobholders are sports-ticket buyers. And because profitable companies are television sports advertisers. And because healthy television networks can pay big rights fees to teams and leagues.

For now, however, many people in sports see more pain than gain in the Clinton program. Neither in his speech nor while stumping for his economic plan afterward did the President mention sports, but in targeting wealthier Americans for hefty tax increases, he was targeting many pro athletes. In assailing business excesses, he was zeroing in on some of the perquisites of sports, at country clubs as well as at colleges and in the pros. For these reasons his sweeping economic plan shapes up as a tough sell not only on Main Street but also in locker rooms and team and league front offices.

Critics of the plan would agree with player-agent Leigh Steinberg, who voted for Clinton but who fears that the White House's proposed tax increases on corporations and individuals will stall the country's economic recovery. In regard to sports Steinberg believes that higher taxes on teams, athletes, sponsors and fans will reduce revenues, resulting in everything from higher ticket prices to cutbacks in charitable donations by players.

"The Clinton plan is potentially devastating for sports," says Steinberg. "It could seriously affect the entire structure of a team or a league. Money that has gone for all aspects of a sports franchise would go to the federal government instead. The question is, What is it that teams will choose to cut? Will it be non-playing personnel? Will it be salaries for players? Will it be a third set of football helmets? The plan could have more than a ripple effect. It could be a wave." Steinberg worries in particular about athletes' reactions to the program—in part, he jokes, because he fears they may be "less eager to pay their agents."

And many athletes have reacted restively. Another agent, Arn Tellem, says that on the morning after Clinton's speech, he received calls from half a dozen clients upset about the higher taxes they would have to pay if the President's proposals were enacted into law. "A lot of them said they're voting for Jack Kemp in 1996," says Tellem. "And a couple gave me a hard time because I supported Clinton, telling me, 'I told you so.' "

The public, of course, has trouble working up sympathy for well-paid athletes. But with professional team-sports salaries ranging from an average of $400,000 in the NHL to $1.2 million in the NBA, Clinton's proposal to raise the top individual income-tax rate from 31% to 36% of taxable income, plus an additional 3.6% tax on earnings over $250,000, obviously would hit many athletes hard. Michael Jordan, for example, the world's highest-paid athlete in 1992 with earnings, including endorsements, estimated by Forbes magazine at $35.9 million, may have paid as much as $9 million in taxes last year; under Clinton's plan, that tab could jump to some $12 million.

Bitter though such medicine would be, some athletes say they would swallow it without complaint. Portland Trail Blazer guard Terry Porter, who will make $2.2 million from the Blazers this season, says, "Most of the players are willing to pay the extra amount if it's going to help the country. I think it's time everyone started paying for his piece of the pie." Of a somewhat different mind is Dallas Cowboy wide receiver Michael Irvin, who has been invited, with the rest of the Super Bowl champions, to visit Clinton in the White House some time in March. After the President's speech, Irvin, who made $1.25 million in 1992, received a call from Cowboy running back Emmitt Smith. Irvin recounts the conversation.

Smith: "Michael, what is this man trying to do to us?"

Irvin: "When we get to the White House, we'll have to straighten him out."

One athlete who has already minimized the pain of higher taxes is pitcher David Cone, who last December signed a three-year, $l8-million contract with the Kansas City Royals. Anticipating that Clinton would raise taxes, Cone prudently arranged to be paid $9 million of that sum up front, in 1992. If Clinton's plan is implemented, other athletes may do the opposite and ask for deferred pay in hopes that taxes eventually will be lowered again.