News

Actions

Titans May Owe Metro Money For Ticket Tax

CORP-Digital-Default-Image-1280x720-WTVF.png
Posted at 9:43 PM, May 19, 2015
and last updated 2015-09-07 14:18:14-04

NASHVILLE, Tenn. -- The Tennessee Titans appear to be preparing to write Nashville taxpayers a big check.

It comes amid questions raised by NewsChannel 5 Investigates about a deal between the team and a professional ticket scalper.

Our investigation discovered that the Titans cut a deal with that ticket broker -- a deal that included free and discounted tickets -- all to keep their sellout streak alive.

The question is: did taxpayers get their piece of the action?

The home to the Tennessee Titans, LP Field is a city-owned stadium -- with high-definition video screens and other amenities also provided by the city.

To pay for those improvements and for upkeep, the Titans are supposed to collect a $3-per-seat tax on every ticket sold.

But while our investigation discovered the Titans struck a business deal with a professional ticket scalper to be able to tell the NFL that every game was a sellout, they've told city officials another story.

For example: last season's game against Jacksonville.

The Titans told the NFL that "paid attendance" was 69,143. 

For tax purposes, they told the city the "total tickets sold" was 62,638.

 

 

And for the Minnesota game, there was another claim of a sellout -- "paid attendance" of 69,143.

But the Titans told the city, there were just 56,198 "total tickets sold." (View the 2012-2014 reports to Metro here.)

How are we supposed to know which numbers to believe?

"When you have two sets of books, you don't," said veteran Metro Council member Charlie Tygard, who makes his living as a professional tax preparer.

He questioned how the Titans could have two very differents sets of numbers for "paid attendance" and "total tickets sold" after years of boasting about a sellout streak.

"If we've had 180 consecutive sellouts or whatever the phenomenal record of success is -- and if the stadium seats 69,000 -- you multiply 69,000 by 3 dollars and that's what's supposed to go into the taxpayers coffers every game," he added.

The Titans, in a written statement, said the total attendance reported to the league includes both tickets sold and complimentary tickets that are given away.

"It is to our benefit and to the benefit of Titans ticket buyers and other users of the building to maintain one of Metro's greatest public works," the statement continued.

"The notion that we would not collect and remit the user fee on sold tickets is false."

Still, Nashville Finance Director Rich Riebeling said the Titans just recently called him to admit that there might be a problem.

That came after NewsChannel 5 Investigates began asking questions about an audit of the Titans' ticket office earlier this year -- and about that deal between the team and Boca Raton ticket broker Cole Rubin.

"They have said to us that 'we think we're going to owe you money, we do not think it's a significant amount of money' -- significant is always in the eye in the beholder so we'll see what it is," Riebeling said.

In fact, the finance director acknowledged that no one from his office -- or Nashville's Sports Authority -- had ever thought to question the discrepancy between the team's public claims of sold-out games and the numbers reported to the city for the seat tax.

How did that happen?

"You know, the numbers did not stand out as being outrageously wrong," Riebeling said, "and so it just didn't come to the attention of us as something that we needed to look at as carefully as perhaps we should have."

But the finance director said he believes these questions will be a game changer when it comes to the city's oversight of the Titans and the ticket tax.

"At a minimum we are going to want a certification from their auditor, their accountants that Metro has received ever dollar it's entitled to."

By some estimates, the Titans could end up writing the city a check for about $50,000.

Others think the amount could be considerably higher.

Here is the full statement  originally released by the Titans:

After a regularly scheduled internal audit of ticket sales after the 2014 NFL season, we noted irregularities in our own ticket operation. These issues led to an internal investigation, which confirmed these irregularities. We took immediate corrective action, including informing the National Football League and Metro Finance and the Metro Sports Authority, hiring independent accounting professionals to conduct further audits, instituting new and better controls to prevent future occurrences, and restructuring our Ticket Office. We are continuing our investigation to verify the initial findings and make certain nothing has been overlooked.

As an organization, we employ many strategies to maximize ticket sales, including ticket brokers from time to time. Most professional sports teams do also. We also offer, for example, ticket resale services through TicketMaster. Resale of tickets to NFL games is a common and accepted practice. To the best of our knowledge, no ticket broker was a participant in any of our internal ticket policy errors.

We give away hundreds, if not into the thousands, of tickets annually for the specific use of the men and women who serve us in the military and we will proudly continue to do so. The fact that some tickets were falsely designated as military comps on an internal report during a past season can never diminish the esteem in which we hold our servicemen and women, the high regard in which we hold their duty and sacrifice, and the fact that we will continue to provide our military with complimentary tickets throughout each future Titan season.

Our organization prides itself on principles of integrity and we place a premium on our partnerships with the Metropolitan Government and the Sports Authority. We remit between $2.5 and $3.0 million per year in user fees to Metro. We have previously informed Metro Finance and the Sports Authority that as soon as our secondary investigation is concluded, we will promptly pay any additional sales taxes and user fees that result from the findings. As we have said in multiple public hearings over the years and in our private communications with Metro Finance, we are always prepared to be audited at any time and for any time period in connection with ticket sales and related sales and use taxes and fees. With respect to this issue we have always been transparent and will continue to do so. For example, we have agreed to work with Metro Finance going forward to independently certify user fee receipts by audit. This is not and has never been an issue for Titans.

Many terms are used to describe total attendance, but our total attendance is a function of two sets of tickets: tickets sold and tickets given away on a complimentary basis. Our total attendance figures are based on total tickets distributed for each game and is consistent with our policies and NFL policies. We pay the user fee to Metro based on tickets actually sold, as opposed to tickets that are given away—to our employees, our players, to the military, and to other guests. The user fee was designed to benefit the stadium and to help defray Metro’s expenses associated with the upkeep, maintenance and refurbishment of the building. We support the concept of the user fee and collect it for the benefit of the Metropolitan Government for tickets sold. It is to our benefit and to the benefit of Titans ticket buyers and other users of the building to maintain one of Metro’s greatest public works. The notion that we would not collect and remit the user fee on sold tickets is false. The user fee works to Metro’s benefit, Titans benefit and to the benefit of every user of the building.

We have paid the tax due on every single ticket we have ever sold since it went into effect in 2009, as we have for every other event. Any suggestion or statement to the contrary is false.

Related stories: