‘$54-M discrepancy’ in Pacquiao PPV income

http://sports.inquirer.net/137545/54-m-discrepancy-in-pacquiao-ppv-income With his fan-friendly style and unparalleled ring accomplishments, Manny Pacquiao has established himself as a true pay-per-view (PPV) star, arguably next only to the trash-talking Floyd Mayweather Jr. But how much did Pacquiao, boxing’s only titlist in eight different weight divisions, actually earn from enormous PPV numbers, especially those generated in megabouts with the likes of Oscar de la Hoya and Ricky Hatton? Pacquiao himself wanted to know as early as 2011 when he granted his accountants then “unrestricted access to all documents and individuals within” his company, MP Promotions USA Inc. and Bob Arum’s Top Rank. A report subsequently prepared by VisionQwest Accountancy Group indicated supposed discrepancies between PPV proceeds remitted to Top Rank by HBO, which televised Pacquiao’s fights, and those reported in Top Rank’s financial statements. $54-M discrepancy Michael Joseph Cabuhat, VisionQwest executive vice president, estimated the alleged discrepancies at $54 million. The amount covered PPV figures in eight Pacquiao bouts in the United States. Through Pacquiao’s lawyer Tranquil Salvador, the Inquirer asked the boxing superstar if he was aware of how much in PPV earnings he was supposed to get and was actually getting, from Top Rank. Pacquiao was also asked about the alleged $54-million discrepancy cited by his former accountants. Salvador came back with an e-mail from Pacquiao’s “team,” saying the matters were “recycled issues that have been discussed by VisionQwest through the media over the past couple of years in an effort to discredit Bob Arum and Mike Koncz.” “To date, Representative Pacquiao continues to trust his team of advisers,” the boxer’s camp added in the e-mail. PPV earnings a tax issue In an interview with the Inquirer, Cabuhat said that Pacquiao’s actual PPV earnings—if not properly declared—would have an impact on his current tax issues with the United States’ Internal Revenue Service (IRS). Because it could be that Pacquiao owes the US government much more than the estimated $18-million tax liability the IRS is now trying to collect from him, according to Cabuhat, whose firm examined the boxer’s finances from 2010 to 2011. “Unfortunately, I had already declared his income tax and I wasn’t able to include that as part of their income,” he said. BIR In the Philippines, the Bureau of Internal Revenue (BIR) is demanding around P2.2 billion in alleged back taxes from Pacquiao, and the purportedly undeclared PPV earnings could also affect the amount being collected from him here, according to a government tax expert. The Inquirer source said the BIR could wait to see if Pacquiao would collect the PPV earnings from Top Rank. “If he doesn’t complain , the BIR and IRS will still count that as his income,” the source said. Funds owed to Pacquiao Pacquiao signed a second contract with VisionQwest on July 18, 2011, supposedly because the boxer wanted to know how much he was getting in PPV earnings. The contract gave VisionQwest “full access to documents prepared by Top Rank and to challenge any misstated financial statements; auditing of purse, perks, profit sharing, not limited to pay-per-view collection and to enforce contractual obligations and collect on funds owed to Emmanuel D. Pacquiao and/or MP Promotions USA Inc.” Based on documents obtained by the Inquirer, Pacquiao’s December 2008 megabout with De la Hoya gave HBO a net profit of $31,996,576. The amount HBO paid to Top Rank was $31,970,925, but the figure listed in Top Rank’s financial statement supposedly was only $5,468,174. The amounts represented a discrepancy (“out of balance”) of $26,502,751. Cabuhat said the $5.47-million figure reported by Top Rank “reflected” the amount from which Pacquiao’s PPV earnings were computed. After VisionQwest learned about the alleged PPV discrepancies, Cabuhat said his company wrote Pacquiao, telling him about the need to amend his 2009 and 2010 income tax returns. But he claimed Koncz, Pacquiao’s business adviser, told him his firm “will no longer handle that.” Read more: http://sports.inquirer.net/137545/54-m-discrepancy-in-pacquiao-ppv-income#ixzz2opTnRS13 Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook