Rakunitz23
Registered User
- May 17, 2010
- 989
- 0
Hi everyone, I've got a question.
I've never really thought about this until now, but since I'm an unemployed accountant studying for the CPA exam, I figured I'd put my every day knowledge of both Accounting and the NHL to the test.
What is the nature of the relationship between the team, and the league, as far as the business structure is concerned? I haven't given this much thought, but think I've come up with an answer.
I think each individual NHL team is an S Corporation (or C, not sure which), since each team has a President, CEO, etc. The reason I think each team is an S corporation is because of revenue sharing.
For anyone that doesn't know the difference between an S and C Corporation, an S allows flow through of all income, meaning if Me and Sally owned an S Corporation that makes 100k a year, and we choose to split it equally, we each receive 50k, which is then taxed as our individual income. With a C corporation, if we owned the same 100k corporation, that 100k would be hit with corporate taxes. Then, whatever is left would be/could be paid out to us, assuming that is how its done.
If each team is an S corporation, the revenue 'flows through' to the NHL, which is a Limited Partnership (based on the bottom of the NHL.com website). Then, this is where I'm sort of confused. I don't know if league revenues are reported to the NHL, and they receive checks from everyone, and then evenly disburse the total to all 30 owners, or what. If somebody was actually able to understand this dribble that I wrote, and knows the answer, it would be great if you could help me out
I've never really thought about this until now, but since I'm an unemployed accountant studying for the CPA exam, I figured I'd put my every day knowledge of both Accounting and the NHL to the test.
What is the nature of the relationship between the team, and the league, as far as the business structure is concerned? I haven't given this much thought, but think I've come up with an answer.
I think each individual NHL team is an S Corporation (or C, not sure which), since each team has a President, CEO, etc. The reason I think each team is an S corporation is because of revenue sharing.
For anyone that doesn't know the difference between an S and C Corporation, an S allows flow through of all income, meaning if Me and Sally owned an S Corporation that makes 100k a year, and we choose to split it equally, we each receive 50k, which is then taxed as our individual income. With a C corporation, if we owned the same 100k corporation, that 100k would be hit with corporate taxes. Then, whatever is left would be/could be paid out to us, assuming that is how its done.
If each team is an S corporation, the revenue 'flows through' to the NHL, which is a Limited Partnership (based on the bottom of the NHL.com website). Then, this is where I'm sort of confused. I don't know if league revenues are reported to the NHL, and they receive checks from everyone, and then evenly disburse the total to all 30 owners, or what. If somebody was actually able to understand this dribble that I wrote, and knows the answer, it would be great if you could help me out