President Reagan's proposal to knock out sporting events as deductible business entertainment drew a chorus of boos yesterday from professional league representatives and others who depend on large corporate receipts to keep playing their games.
"It'll be a disaster," said Lee MacPhail, president of the Major League Baseball Player Relations Committee, the labor-bargaining arm for all 26 major league baseball teams in the United States.
"We've already got big financial problems here. We can't afford to lose any business," MacPhail said.
Approximately one-third of all baseball tickets and over one-half of all hockey tickets are purchased by businesses each year, according to Reagan administration estimates.
Football and other sporting-event tickets -- as well as tickets for concerts and theatrical events -- also are bought by businesses to be distributed to clients, advertisers, or anyone else who presumably could help build corporate image or revenue.
It is a way of life that the Reagan administration would like to abolish in its new campaign to build a simpler and more equitable tax system.
"The cost of tickets to a sporting event for friends of a business person is deductible if they are business associates; but the cost of tickets for friends of a secretary, sales clerk, or nurse must be paid for with after-tax dollars," the administration's tax proposal states in calling for the elimination of sports and other entertainment deductions.
Redskins owner Jack Kent Cooke would not comment on the president's tax plan when contacted Wednesday. "I'll have no comment on that until I have a chance to examine what the president had in mind," he said.
Dallas Cowboys President Tex Schramm said he was not concerned that the proposed tax changes would change the allegiance of the Texas businesses that make up 20 percent of the Cowboys' season ticket holders.
"The cost of attending sports events , whether they are tax deductible or not, is not going to change the business practices of companies around the country," Schramm said. "It's such a reasonable expense, even if it becomes not tax deductible, it still will be a profitable area for people in business. It's so reasonable compared to other ways business entertainment is done."
Frank DeFrancis, owner of Maryland's Laurel Racecourse and Freestate Raceway, said Wednesday the proposal to eliminate deductions for entertainment expenses such as ticket costs "certainly would impact" his tracks. It would have "a negative impact" on his dining rooms, he said, "like any good restaurant." DeFrancis couldn't say how much the Reagan proposal would hurt his racing operations.
Eugene D. Orza, counselor to the Major League Baseball Players Association, called the Reagan administration assessment of the sports deduction inequity "backwards."
"To the extent that a part of the reasoning is that deductions for sports tickets constitute a subsidy for the wealthier class, the proposal is backwards," Orza said. Corporate purchases of large blocks of tickets help ball-club owners and stadium authorities keep sporting events prices low for everyone else, Orza said. If the administration is successful in sacking entertainment deduction proposals in Congress, "people who now pay $8 for a ticket could well end up paying $10, or more," Orza said.
"A significant number of our tickets are purchased by corporations," said Richard K. Glover, vice president and chief administrative officer of the Washington Bullets. "If this proposal is approved, we'd suffer a 30 percent drop in season ticket purchases, right off the bat. The loss could be significantly higher. And we're not in the best financial shape," Glover said.
Glover, echoing the sentiments of other sports officials reached yesterday, accused the administration of using business entertainment deductions "to conduct a public relations campaign to push his tax proposals through Congress."
But the Reagan administration could lose more money than it saves with its proposal to wipe out deductions for sports and other entertainment events, Glover said.
"The amount of money that they would save from this will have very little effect on federal revenue. But a number of marginal sports franchises could go out of business. Some stadiums could close. That might not mean much on a national scale, but it could have a great impact on local economies," Glover said.
"The facts are obvious: that the administration's proposal is potentially devastating to a number of clubs," said Lawrence Lucchino, vice president of the Baltimore Orioles.