Sports Tax

Covington is the nationwide leader in providing tax advice to the sports industry. We serve as the lead outside tax counsel to Major League Baseball, Major League Soccer, the National Basketball Association, the National Football League, and the National Hockey League. We also work with dozens of teams in those leagues, as well as governing bodies such as FIFA, the US Tennis Association, and the U.S. Olympic and Paralympic Committee. Our sports industry tax planning work includes league governance, licensing and media deals, and cross-border issues such as transfer pricing and treaty analyses. Covington’s sports-focused tax lawyers also advise teams and leagues on all manner of player compensation, fringe benefits, Section 409A, and other employment tax issues. We represent our sports industry clients in federal and state audits, IRS Appeals, and in Tax Court. We also have particular expertise in representing tax-exempt entities in the industry.

Capabilities

• Advising on the tax aspects of corporate transactions such as clubs sales and club financing arrangements
• Advising on licensing, sponsorship, and media deals, including the international tax aspects of cross-border deals
• Creating tax-efficient stadium and arena financing structures, including using tax-exempt bonds and personal seat licenses (PSLs)
• Advising on international tax aspects of holding games, matches, and tournaments in foreign jurisdictions
• Reviewing player contracts and executive employment agreements regarding state taxation (including for traveling employees), the taxability of fringe benefits, the tax treatment of signing bonuses and performance bonuses, and traps under Section 409A
• Developing audit strategies and responding to IDRs at the federal and state levels
• Drafting protests, making presentations to IRS Appeals and the IRS National Office, and negotiating settlements with state revenue departments
• Drafting intercompany agreements and establishing the transfer pricing for those agreements