Nobody Beats Uncle Sam

MANILA, Philippines (JGL) – Even before the bell rings for the Floyd Mayweather and Manny Pacquiao fight on May 2, there is already a clear winner: Uncle Sam!

If the two fighters split the guaranteed $200-million purse, with Mayweather taking plum 60 percent or $120-M and Pacquiao taking in 40 percent or $80-M, the United States Internal Revenue Services stands to gain at least $74-M, which is equivalent to almost 37 percent of the total pot, from both fighters.

Go figure, as a U.S. citizen, Mayweather is supposed to pay 35 percent income tax of $120-M to the IRS, which is roughly $42-M. The balance that he takes home with him is $78-M.

On the other hand, as a U.S. non-resident alien, Pacquiao is supposed to pay Uncle Sam the top tax bracket of 39%, which is roughly $31-M. The Sarangani Congressman would be taking home $49-M or 2.1-billion pesos out of the prize purse.

The pot does not include the pay-per-view (PPV) sale, which is expected to break the bank. A PPV could cost $95 per, up from $55 when the De La Hoya vs. Mayweather broke the records of most PPV buys for a boxing match with 2.7-million households in 2007 that raked in $148-M.

A record of from three to four million PPV buys is expected during the Saturday Mayweather-Pacquiao bout that will earn from $285-M to $380-M. Of these PPV buys, $171-M or 60 percent of the minimum $285-M PPV buys will add to Mayweather bottom line with $111.1-M, with Uncle Sam sharing $59.8-M.

PACQUIAO’S TAKE HOME: AT LEAST $127-M

Pacquiao, on the other hand, will get the $114-M slice or 40 percent of the $285-M from the PPV buys. The US IRS stands to collect from Pacquiao $44-M while Manny takes home $70-M, easily eclipsing Manny’s prize pot of $49-M, for a total of $119-M.

If the live gate generates $72-M, Mayweather gets the share of $28-M while the IRS gets $15-M. Pacquiao gets $17-M, while Uncle Sam gets $11-M from Pacquiao’s share.

Mayweather stands to earn $220-M for the pot prize $78-M, PPV ($114-M) and live gate ($28-M) combined. While Pacquiao will earn $127-M out of the pot prize of ($40-M), PPV ($70-M) and live gate ($17-M).

Uncle Sam takes in $202-M for the pot prize ($73-M), $103-M for PPV and $26-M for (live gate).

Throw in the commercial endorsement of products, the shares of Mayweather, Pacquiao and Uncle Sam must be staggering.

If Manny beats Mayweather via a controversial decision and Mayweather demands a rematch, Manny gets the upper hand or the “A” side. This means Manny can dictate the terms, including the Philippines hosting the rematch.

Not only Manny will make a killing with a reduced tax assessment of 32 percent if the rematch were held in the Philippines, the Philippines’ Bureau of Internal Revenue stand to gain 32% of all incomes from top prize, PPV, live gate, endorsement, etc. during the rematch. The BIR also stands to earn an additional 1 to 3 percent worldwide income from Manny based on the Convention between the U.S. and the Philippines with respect to taxes on income signed in Manila on October 1, 1976.

The Philippines BIR will also earn 32 percent from all of Mayweather’s incomes during his fight in the Philippines.

As to who will win the fight on Saturday? My fearless forecast: it is Manny winning by decision! Because both athletes are equally talented, I am basing my hunch on the outcome of the fight on superstition.

Pop idol Justin Bieber stole my heart when he went to Tacloban to help the super typhoon Yolanda (Haiyan) victims. But that  feeling changed when I learned that Justin would be walking alongside Mayweather in the final walk towards the ring on Saturday. Justin has a poor record of rooting for winning athletes. I feel he is not going to be a lucky charm on Saturday for the boxer, who claims to be the best ever.

Go Pacman!

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