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Putnam
06-06-2009, 07:53 AM
Responding to the Daniels plan to replace the Capital Improvements Board, PS&E President Jim Morris says the Pacers may reconsider paying the ticket tax on all Pacers tickets (instead of letting ticket buyers pay it) after the propsed increase.

Did you know that the Pacers were paying the tax on your tickets?



Pacers Sports & Entertainment President Jim Morris said the franchise has shielded fans from the tax by paying about $2 million a year in admission taxes.

"We've always eaten it," Morris said. "I think we're going to have to take another look going forward. I understand the rationale for increasing the tax. For a franchise already losing money, it will be difficult to pay it."


http://www.indystar.com/article/20090606/LOCAL/906060448/



Pacers, Indiana object to ticket tax increase
Indy Star
June 6, 2009

The Indiana Pacers and Indianapolis Indians said Friday they are concerned about the impact the Capital Improvement Board's proposed ticket tax increase would have on fans.

Part of the plan to close a projected $47 million deficit calls for a 10 percent tax on each ticket, a 4 percentage point increase. The proposal, unveiled Thursday by Gov. Mitch Daniels and Indianapolis Mayor Greg Ballard, has not been approved.

Pacers Sports & Entertainment President Jim Morris said the franchise has shielded fans from the tax by paying about $2 million a year in admission taxes.

"We've always eaten it," Morris said. "I think we're going to have to take another look going forward. I understand the rationale for increasing the tax. For a franchise already losing money, it will be difficult to pay it."

Cal Burleson, vice president and general manager of the Indians, said the proposal is "basically designed to assist in the rescue of other venues over which we have no control."
Burleson said the Indians pay all of their operating costs at Victory Field.

"Indians fans paid nearly a quarter of a million dollars because of the current ticket tax . . . and this proposed increase would place an additional tax burden of $150,000 to $200,000 upon us annually," Burleson said. "Our fans are made up of a broad cross-section of people from all over Indiana, and it's time to stop inflicting higher taxes on them and us because of the missteps of others."

--- Star report

Naptown_Seth
06-06-2009, 09:51 AM
Maybe the Colts can start picking up my property tax bill. That way I could afford more Pacers tix.

;)

Brad8888
06-06-2009, 10:09 AM
They can't be serious...

On the face of each ticket it plainly states "Price Includes 6% Marion County Adm. Tax". This means that the ticket purchaser DID pay the admission tax in the price of the ticket, and that the Pacers DID NOT eat the tax as he is asserting. I am quite confident that they can work their magic calculators and show the total ticket sales receipts multiplied by a factor of .943396226 prior to turning them in to Marion County for tax payment purposes, as any other business would on sales taxes that are included in their prices.

The only way that the Pacers "eat" the tax is if they are charged additional taxes after the tickets are sold at a certain price that already takes the original taxes into account. Does anybody think the sales taxes are "eaten" at the concession stands that sell at horrific prices also?

It is somewhat frightening that Jim Morris is either

A. not intelligent enough to have his staff do this simple math and thereby save the
franchise from taking this "loss" by having them priced properly to begin with

or

B. willing to spread a story that somehow the ticket buying fans who pay both the
Pacers' share AND Marion County's share of the money received are not actually
paying both.

I would guess that his actual gripe with this is that the team has already set their prices for the upcoming season, and his magic calculators are telling him that a new multiplier will be in effect on the end pricing of .909090909, and the Pacers don't want to actually eat roughly 3.43% of the ticket sales that are actually turned in compared to what they actually budgeted for in setting their pricing.

On all of the cheap promotional tickets that were utilized last year and will likely be again this year due to the economy, an additional 3.43% "loss" on only those tickets is a small price for the franchise to pay, IMO, on tickets sold after this goes into effect.

duke dynamite
06-06-2009, 10:30 AM
They can't be serious...

On the face of each ticket it plainly states "Price Includes 6% Marion County Adm. Tax". This means that the ticket purchaser DID pay the admission tax in the price of the ticket, and that the Pacers DID NOT eat the tax as he is asserting. .

I'm pretty sure they are eating it. On our end, the ticket prices would be slightly higher if they didn't. On their end, that would also make the price of the tickets lower.

This is something I spoke with to my first rep years ago. I asked him if they charged tax, because the price of my ticket package could've been larger. He told me that it's taken care of. I asked him if it was already included in the price. He told me no, they don't charge "us" tax on the tickets.

Once I got my tickets in the mail, I read that little thing, and called my rep. He told me that they just put that text on the ticket for "legal" reasons in which he wouldn't really give me the details why.

I've come to believe you can't always believe what you see on the tickets.

Putnam
06-06-2009, 10:56 AM
:mjpopcorn:

Brad8888
06-06-2009, 11:16 AM
You need to believe what you see on the tickets, front and back.

What the rep should have stated is that the admissions tax is included in the price of the ticket, just as it is printed. They would not bother printing it on there if it were not the case. In fact, that statement is put on there to protect people from being fooled into paying an additional admission tax beyond what has already been charged by an unscrupulous vendor.

You do realize that a ticket represents a contractual license agreement for the holder of the ticket, don't you? On the back of the ticket is a lot of verbiage that nobody pays attention to, either. But, in the exceedingly unlikely event that things go horribly wrong, the holder of the ticket voluntarily assumes all risk and danger (printed in all caps) of personal injury, including death. In the event that something were to happen, which of course is so unlikely as to be laughable to even consider, you can rest assured that the attorneys involved in any legal action would instantly utilize this license agreement to fully protect the Pacers.

Also, on that ticket, it states that the holder agrees not to transmit, distribute, or sell any description, account, picture, video, audio or other form of reproduction of the event
or any surrounding activities for which the ticket is issued. I am very sure that this website has already gained direct permission from the franchise that gives members protection from this part of the license agreement, or that the franchise simply chooses not to enforce it due to public relations concerns. Most posts by those of us who attend games would violate the terms of this agreement, otherwise, because even without pictures, we are describing what we observed, at least to an extent.

You should also realize that most sales reps can't be held liable for their verbal statements under contract law, either. This is due to the fact that it would be nearly impossible to prove what either side said in such a dispute.

Brad8888
06-06-2009, 11:20 AM
:mjpopcorn:

Do you prefer your popcorn with butter and salt? :rolleyes:

Putnam
06-06-2009, 11:57 AM
.

This is a typical question of tax incidence. The final consumer nearly always pays the tax, no matter from whom it is collected. In the case of retail sales tax, the state collects the tax from the merchants, but the burden of the tax falls on consumers.

In this case, supposing the Pacers do pay the admissions tax. You have to ask, "With what money?" If it is money collected through Pacers' business, then the ticket buyers are paying it.

However, the Pacers in recent years have been losing money. Their expenses have exceeded their revenues. The Pacers certainly have had to pay the admissions tax to the state, even for tickets that they gave away or sold at discount.

So, even acknowledging Brad's point, I can see a way in which Morris' statement is true. Or at least kinda true.


.

Hicks
06-06-2009, 12:20 PM
Didn't we have this conversation once before in regards to whether or not a ticket is, in fact, a contract or not? I thought the conclusion at that time was it's a bunch of bull and they just use that space to claim certain things that may or may not have any true legal strength behind it. That's a different thing than the issue of the tax %, but it still deals with how seriously anyone should take what's printed on them.

If the Pacers are saying the spend $2mm a year to cover the tax, I have no reason to call BS on them.

Sure, technically you can always say the customer is paying it, but the point appears to be that the Pacers are taking a given amount of money they could keep and choosing to turn around and "give it away" by keeping consumer ticket prices slightly lower than they could be.

Brad8888
06-06-2009, 12:35 PM
Ultimately, if the Pacers sell no tickets, they pay no tax, because there would be no admissions revenue to tax. The tax that they pay is a 6% surcharge on the revenues they collect on each license agreement (ticket) sold. I am sure that they understand the math as I described it in my earlier post.

Tom White
06-06-2009, 01:13 PM
Sure, technically you can always say the customer is paying it, but the point appears to be that the Pacers are taking a given amount of money they could keep and choosing to turn around and "give it away" by keeping consumer ticket prices slightly lower than they could be.

It strikes me odd that they (the Pacers) feel so bad about charging the customers a tax on the tickets, yet turn around and stick it to the fans at the concession booths. I have not bought a beer at a game, but since I do know about the cost of beer, I'll use that as an example.

From a local distributor, a keg of Bud Light costs $63.00 when purchased at a 25 keg level. I'm sure the Pacers purchase at levels above this. That keg holds 15 1/2 gallons of beer. Divide that by a 12 ounce glass, and you get roughly 165 beers. Someone who knows how much they charge for a beer can do the math and figure out how much they are making off each one, or each keg.

You can do the same thing with Hot Dogs, caps, or whatever. You had better believe they are figuring that tax into their ticket prices, regardless of what is said.

Hicks
06-06-2009, 01:16 PM
Well, if they're going to cut me a break, I'd rather it be on the thing I HAVE to buy (ticket) instead of on something I can ignore (the food/drinks).

duke dynamite
06-06-2009, 03:52 PM
You need to believe what you see on the tickets, front and back.

What the rep should have stated is that the admissions tax is included in the price of the ticket, just as it is printed. They would not bother printing it on there if it were not the case. In fact, that statement is put on there to protect people from being fooled into paying an additional admission tax beyond what has already been charged by an unscrupulous vendor.

You do realize that a ticket represents a contractual license agreement for the holder of the ticket, don't you? On the back of the ticket is a lot of verbiage that nobody pays attention to, either. But, in the exceedingly unlikely event that things go horribly wrong, the holder of the ticket voluntarily assumes all risk and danger (printed in all caps) of personal injury, including death. In the event that something were to happen, which of course is so unlikely as to be laughable to even consider, you can rest assured that the attorneys involved in any legal action would instantly utilize this license agreement to fully protect the Pacers.

Also, on that ticket, it states that the holder agrees not to transmit, distribute, or sell any description, account, picture, video, audio or other form of reproduction of the event
or any surrounding activities for which the ticket is issued. I am very sure that this website has already gained direct permission from the franchise that gives members protection from this part of the license agreement, or that the franchise simply chooses not to enforce it due to public relations concerns. Most posts by those of us who attend games would violate the terms of this agreement, otherwise, because even without pictures, we are describing what we observed, at least to an extent.

You should also realize that most sales reps can't be held liable for their verbal statements under contract law, either. This is due to the fact that it would be nearly impossible to prove what either side said in such a dispute.
Sure, I am going to prosecute my rep for telling that information, because you are right and he is wrong.


Didn't we have this conversation once before in regards to whether or not a ticket is, in fact, a contract or not?

Hence why I said I don't believe what the ticket says anymore. Other than where my seat is and the date.

Dr. Goldfoot
06-06-2009, 04:04 PM
It strikes me odd that they (the Pacers) feel so bad about charging the customers a tax on the tickets, yet turn around and stick it to the fans at the concession booths. I have not bought a beer at a game, but since I do know about the cost of beer, I'll use that as an example.

From a local distributor, a keg of Bud Light costs $63.00 when purchased at a 25 keg level. I'm sure the Pacers purchase at levels above this. That keg holds 15 1/2 gallons of beer. Divide that by a 12 ounce glass, and you get roughly 165 beers. Someone who knows how much they charge for a beer can do the math and figure out how much they are making off each one, or each keg.

You can do the same thing with Hot Dogs, caps, or whatever. You had better believe they are figuring that tax into their ticket prices, regardless of what is said.

Of course an $8 bottle of wine costs $45 bucks at a restaurant and you can get about 35 shots out of a bar liter at a bar. Do the math there.

idioteque
06-06-2009, 04:22 PM
It strikes me odd that they (the Pacers) feel so bad about charging the customers a tax on the tickets, yet turn around and stick it to the fans at the concession booths. I have not bought a beer at a game, but since I do know about the cost of beer, I'll use that as an example.

From a local distributor, a keg of Bud Light costs $63.00 when purchased at a 25 keg level. I'm sure the Pacers purchase at levels above this. That keg holds 15 1/2 gallons of beer. Divide that by a 12 ounce glass, and you get roughly 165 beers. Someone who knows how much they charge for a beer can do the math and figure out how much they are making off each one, or each keg.

You can do the same thing with Hot Dogs, caps, or whatever. You had better believe they are figuring that tax into their ticket prices, regardless of what is said.

Breaking News, concession stands at athletic events are grossly overpriced!

I agree with the sentiment, well at least to an extent, but the Pacers can get away with concession prices because everyone else can, too. They're just trying to make money like everyone else. If you don't like it, get something at a restaurant before the game, or if you're like me, smuggle a turkey sandwich made at home into the Fieldhouse. :)

Roaming Gnome
06-06-2009, 05:36 PM
Damn, what next?

Peter_sixtyftsixin
06-06-2009, 05:46 PM
Breaking News, concession stands at athletic events are grossly overpriced!

I agree with the sentiment, well at least to an extent, but the Pacers can get away with concession prices because everyone else can, too. They're just trying to make money like everyone else. If you don't like it, get something at a restaurant before the game, or if you're like me, smuggle a turkey sandwich made at home into the Fieldhouse. :)

I agree with what you said, but isn't a major problem PS&E has right now is that they don't control the concession stands? Or at least don't see a lot, if any, of the revenue made from it?

Putnam
06-06-2009, 06:27 PM
The tax has to be paid on every ticket sold. If the Pacers were profitable, then they would have the option to either pay the tax (thereby reducing their profits) or pass the expense on to customers (by raising the total cost of tickets.)

But as long as they are in the red, at least some of the cost of the tax has to be coming out of the Simons' pockets.

Brad8888
06-06-2009, 07:10 PM
Sure, I am going to prosecute my rep for telling that information, because you are right and he is wrong.



Hence why I said I don't believe what the ticket says anymore. Other than where my seat is and the date.

I certainly did not ever intend to get into a debate about this. Never mind. :meditate:

Pacers
06-07-2009, 02:05 PM
LOL. Yeah, go ahead a raise the ticket prices. That'll help draw a lot of born again fans back to the house.

:rolleyes:

Trophy
06-07-2009, 04:49 PM
They're not paying my taxes.

ABADays
06-07-2009, 07:23 PM
Didn't we have this conversation once before in regards to whether or not a ticket is, in fact, a contract or not? I thought the conclusion at that time was it's a bunch of bull and they just use that space to claim certain things that may or may not have any true legal strength behind it. That's a different thing than the issue of the tax %, but it still deals with how seriously anyone should take what's printed on them.

Bingo. If each person is not sat down individually and explained the liability they are assuming AND that they understand it there is nothing on a ticket that would stand up in court.

YoSoyIndy
06-07-2009, 09:34 PM
They can't be serious...



The reason Morris can claim PSE eats the tax is because when the ticket tax was implemented the price of the ticket didn't increase, so they ate the increase.

Consider it this was -- if the CIB ticket tax goes into place, the team can either increase the ticket by the same amount and pass the tax along to the fan or they can keep the price the same and "eat" the tax.

ChicagoJ
06-08-2009, 01:21 PM
I agree with what you said, but isn't a major problem PS&E has right now is that they don't control the concession stands? Or at least don't see a lot, if any, of the revenue made from it?

At MSA, Ogden kept all of the profits. That was one of the key reasons the city had to subsidize the team in the MSA era, and this was supposed to be different at Indiana Fieldhouse where the Pacers allegedly control all the revenue for all events.

Unclebuck
06-08-2009, 01:31 PM
There is a difference between the way the Colts do it and the pacers do it. Colts have it on the ticket as an "additional charge" Pacers do not

Bball
06-08-2009, 02:05 PM
The tax has to be paid on every ticket sold. If the Pacers were profitable, then they would have the option to either pay the tax (thereby reducing their profits) or pass the expense on to customers (by raising the total cost of tickets.)

But as long as they are in the red, at least some of the cost of the tax has to be coming out of the Simons' pockets.

Wouldn't the tax be like sales tax where it is collected at each sale and goes into a separate fund entirely and never is part of the Simons' money in the first place?

They only way they could argue they are eating the tax is if the ticket prices remained static from before the tax was announced and added. But once they started monkeying with ticket prices (either up or down) then they could no longer say they were eating the tax because it certainly would've been taken into account as the prices were being re-set.

ChicagoJ
06-08-2009, 02:42 PM
This would go a lot smoother if everyone (including Jim Morris, perhaps) was using the same definitions.

It is easy to see a scenario in which the Pacers include the ticket tax in the face value of the ticket (no additional charge, see UncleBuck's post above) and thus are paying the tax for us. It is also easy to see a scenario in which the ticket tax is added to the face value of the ticket in the same manner as the various TicketMaster charges are added.

When I buy an $85 Springsteen ticket, my back account takes a much larger hit than just the $85 bucks with facilities charges, convenience charges, entertainment taxes, etc. Back when I was a season ticket holder, a $40 seat would cost $403 for a ten-game package, $883 for a half-season (22 games) package, and $1803 for a full-season (45 games) package. Now... the extra $3 "processing fee" always killed me. I assume it is still the same, but I don't know.

The question is not "did they raise ticket prices to cover the tax" or not. It just isn't relevant to what Jim Morris is saying.

My hunch is that Morris was talking about paying the tax for season ticket accounts, and not for every seat sold via Ticketmaster or the box office.

Putnam
06-08-2009, 02:48 PM
Wouldn't the tax be like sales tax where it is collected at each sale and goes into a separate fund entirely and never is part of the Simons' money in the first place?

This is a good question, and I don't know the answer.

What we really need is somebody on this forum who works as an accountant for a big accounting firm -- especially somebody with experience working for professional sports teams. Then we could get an answer with some authority behind it. J? (How about that? He answered the question between the time BBall asked it and I posted this. )


What about the tickets they gave away? If I recall, the freebie and discounted tickets last season has a processing fee, but I don't remember paying the admissions tax.

ChicagoJ
06-08-2009, 05:01 PM
What we really need is somebody on this forum who works as an accountant for a big accounting firm -- especially somebody with experience working for professional sports teams.

From that criteria, you're probably talking to me.

There is flexibility here. Clearly if there is an additional fee that would go into an escrow account to pay the tax liability to the authority whenever payments are due. But if not, they could pay directly from their own account.

I suppose a grocery store could argue that they pay our sales tax too, although they merely collect it from us and then pay it in aggregate. Is the sales tax supposed to be a tax on the consumer or the retailer? In practice, it is a tax on the consumer because the retailers add it to the total and therefore pass the expense along to the consumers. But I don't think they are required to do so. They could choose to pay x.x% of their retail proceeds from their own pocket and still meet the requirements. They could advertise "sales tax is included in the price of the items", and even charge the customer a bit more because of that.

I understand that outside the US, it is more common for the sales tax to be included in the listed retail price as opposed to added-on.

I think to be intellectually honest, the consumer always pays these type of revenue taxes, whether broken out separately or not. Why? Because with the possible exception of alimony, taxes generally get paid first, before other costs of operations. And without the consumer, there is no revenue in the first place.

Naptown_Seth
06-08-2009, 06:41 PM
I agree with where this is headed. Bottom line is they collect cash for an item at a rate they feel the market can bear, or better said at a price point that maximizes monitory sales. 1 ticket for $1m or a million tix for $1 is all the same without other factors.

Of course those factors could be TAX PER TICKET, plus cost of additional vendors, security, etc. Certainly the 1 guy paying for the million dollar seat takes less security and beer vendors working. ;)

So other than those cost variations based on attendence you basically have a big kitty with monies divided up, and in the end someone gets paid to own the team or they don't.

They are eating the tax as much as they are eating the cost of paying Danny Granger as his salary goes up.


My issue with the complaints is always this - they suffer the market so STFU and just don't pay if you don't like it. I mean I'll gripe with the rest of you when the thing I like is priced out of my range, but damn, just because I like Porsches doesn't mean I get to flip out because I can't buy one new for $5K.

You don't hate the team you hate the market. I hate it too. I hated that I couldn't get a good seat when Kings of Leon came to Murat last year after easily getting 2 feet from the stage for the lesser attended Vogue shows. That's the market, oh well.


The flipside of this is I don't feel sorry for the team when things turn south. We all love it when its going our way, but if you get in the game you gotta have the stomach for the losses too.

Regardless, does it really matter if my next KoL ticket has 15 different flavors of fees on there as long as I'm willing to pay the total cost prior to purchase? Maybe I want the band to get all my cash and the middle men to get none, but I don't control the division of money, just whether they get any or not.

If too many middle men jump in there, including govt taxes, then they will price people out of the market and see losses. But that's true even if the money was all going to one single greedy SOB fat cat. The govt knows they can tax a market too much and dry up the income just like a company knows they can overprice their product.


I think to be intellectually honest, the consumer always pays these type of revenue taxes, whether broken out separately or not. Why? Because with the possible exception of alimony, taxes generally get paid first, before other costs of operations. And without the consumer, there is no revenue in the first place.
Exactly. And who cares anyway.

YoSoyIndy
06-08-2009, 09:58 PM
Wouldn't the tax be like sales tax where it is collected at each sale and goes into a separate fund entirely and never is part of the Simons' money in the first place?

They only way they could argue they are eating the tax is if the ticket prices remained static from before the tax was announced and added. But once they started monkeying with ticket prices (either up or down) then they could no longer say they were eating the tax because it certainly would've been taken into account as the prices were being re-set.

That's what they did. They ate the cost by not increasing prices by the amount of the tax, and that's what Morris said in the article -- that they may have to increase the ticket price so they don't eat the amount.