Accounting
Atlanta Braves face $19M tax-hike battle over athlete pay
The Atlanta Braves, the country’s only publicly traded Major League Baseball team, is facing off against the U.S. Tax Code in a lonely battle that threatens to cost the franchise millions.
A little-known tax rule soon to go into effect will restrict public corporations from deducting the salaries paid to their highest compensated employees. For Atlanta Braves Holdings Inc., those employees are players — including first baseman Matt Olson, third baseman Austin Riley and former National League Most Valuable Player Ronald Acuña Jr.
Privately held teams like the New York Mets, owned by Point72 Asset Management founder Steve Cohen, and billionaire John Middleton’s Philadelphia Phillies, won’t get hit by the tax. The Mets, for example, can deduct every dime paid to outfielder Juan Soto, a free agent lured from the New York Yankees with a record-setting $765 million, 15-year contract.
The team’s five most generously compensated players are set to collectively earn $96 million in 2027 — the year the new rule limiting salary deduction for all but $1 million of each of the top five most highly compensated players’ pay.
That amounts to a potential $19.1 million tax hike on the Braves, assuming a 21% corporate tax rate. The team paid $4.2 million in federal income taxes in 2024, according to a regulatory filing.
The company had pre-tax loss in 2024 of about $36 million, when revenue was $662 million. Representatives for the Braves declined to comment.
The Braves will be at a significant disadvantage under the tax code, according to Douglas Schwartz, a Nossaman LLP partner who specializes in tax matters. The team would be particularly harmed when pursuing free agents because they’d have to factor in the additional tax burden, in addition to the contract amount when competing for top talent, he said.
The only other major league team owned by a publicly traded company is the Toronto Blue Jays. Rogers Communications, a Canadian entertainment conglomerate with nearly $20.6 billion in annual revenue, doesn’t expect any meaningful impact from the U.S. tax provision, according to company spokesman Zac Carriero.
That leaves the Braves without any MLB allies in this fight, which requires congressional intervention before 2027 tax returns are due if they hope to dodge the new tax. The team hired a pair of lobbyists in February to bend lawmakers’ ear about the rule, according to federal filings.
There is, however, one other professional sports entity affected by the 2027 tax hike: Madison Square Garden Sports Corp., which owns the National Basketball Association’s New York Knicks and the National Hockey League’s New York Rangers.
That may not give the Braves the most politically sympathetic bedfellow. The company, run by billionaire James Dolan, has been criticized for a state tax deal cut in the 1980s that has exempted them from $1 billion in property taxes. A spokeswoman declined to comment.
The Braves’ lobbyists may not find a receptive audience in Congress, according to a person familiar with the talks in Washington. Republicans like the tax because it raises much-needed revenue from a relatively unpopular source: big companies whose top employees earn millions. Democrats like it for the same reason, said the person, who asked not to be identified to discuss confidential conversations.
The Tax Code generally allows companies to write off employee compensation as a business expense. But efforts to curb those write-offs for multimillion-dollar salaries date back to former President Bill Clinton’s first term, after he’d campaigned on reining in corporate greed at a time when middle-class voters were reeling from jobs being moved offshore.
The rule initially only applied to executive pay — not employee compensation — but it was broadened to include the five highest worker salaries as part of former President Joe Biden’s pandemic relief bill, with a delayed effective date until 2027.
Companies can lessen the blow by employing sophisticated tax techniques, including timing other losses to offset the higher tax bills, according to Deb Lifshey, a managing director at Pearl Meyer, an executive compensation and leadership consulting firm. Another option is to go private, which reduces oversight and regulation.
“We always have companies that struggle with the question, is it worth it to be public?” Lifshey said.
For the Braves, finding a buyer willing to take the team private might be difficult. The team was spun off by Liberty Media Corp. in 2023 at a time when the sales tags for sports franchises were spiking — and the Braves were riding a high coming off a 2021 World Series win and had top stars locked into multi-year contracts.
While teams in other leagues — including the National Football League’s Washington Commanders and the NBA’s Boston Celtics — have broken sports franchise sale prices records in recent years, the market for baseball teams hasn’t been quite as lucrative.
Private equity titans David Rubenstein and Michael Arougheti bought the Baltimore Orioles in 2024 for $1.7 billion, $700 million less than Cohen paid for the Mets four years prior. Mark Lerner and his family put the Washington Nationals up for sale in 2022, and took them off the market two years later after failing to find a buyer who’d meet their purchase price.
Absent going private or winning a lobbying effort, the Braves may end up saddled — at least temporarily — with a tax bill no other team in the league faces.
“I just don’t think Congress ever thought about this when it enacted the rule,” Schwartz said.
The Tennessee General Assembly passed legislation backed by the Tennessee Society of CPAs adding an extra pathway to a CPA license, as more states make efforts to alleviate the shortage of new accountants.
SB 1316/HB 1330, introduced by Senate Majority Leader Jack Johnson and House Majority Leader William Lamberth on behalf of the administration, was filed for introduction on Feb. 6. The legislation aligns with Tennessee Governor Bill Lee’s goal to streamline state boards and simplify licensing. Members of the Tennessee Society of CPAs
The legislation offers two pathways to licensure for prospective CPAs starting Jan. 1, 2026. Applicants can either:
- Ccomplete the traditional path of at least 150 semester hours of college education including a bachelor’s degree plus one year of accounting experience; or,
- Complete at least 120 semester hours of college education including a bachelor’s degree plus two years of accounting experience.
For both options, the coursework needs to include an accounting concentration as determined by Tennessee State Board of Accountancy rule.
In addition, the legislation includes CPA practice mobility provisions so CPAs can still practice across state lines. Current and future CPAs who don’t have a principal place of business in Tennessee will be able to practice in the state if they hold a valid CPA license in good standing from another state and if, at the time of licensure, they showed evidence of having passed the Uniform CPA Exam. They need to consent to the jurisdiction and disciplinary authority of the TSBOA, comply with the applicable statute and board rules of the state, and cease offering services in Tennessee if their license in the state of issuance is deemed to be no longer valid. These changes will take effect July 1, 2025.
(Read more: See
“This legislation is a key step in ensuring that the demand for skilled accounting professionals, specifically licensed CPAs, can be met now and in the future,” said TSCPA president and CEO Kara Fitzgerald in a statement Monday. “Tennessee was a leader in advocating for the 150-hour rule in the 1990s, and as the needs of the profession change, Tennessee will continue to lead in evolving our licensure model to make sure we meet those needs.”
The bill will now be sent to Gov. Lee and, once he signs it, will become effective on the dates stated above.
Other states besides Tennessee have been
Baker Tilly and Moss Adams have made their merger official, combining to form what promises to be the sixth largest CPA firm in the U.S.
Rumors of the
Baker Tilly, based in Chicago, ranked No. 11 on Accounting Today‘s 2025 list of the
Baker Tilly CEO Jeff Ferro will be CEO of the combined firm through his retirement, while Eric Miles, who is currently Moss Adams’ chairman and CEO, has been named CEO-elect. Miles will assume the role of CEO on January 1, 2026, with Ferro remaining a director on Baker Tilly’s board thereafter.
“Moss Adams is a great strategic fit with Baker Tilly,” Ferro said in a statement Monday. “We’ve long respected the firm, its people and its industry-focused approach. By bringing together our strengths, we are expanding our ability to serve middle-market businesses with greater expertise, resources and insights.”
“The resources, geographic reach and go-to-market strength of the combined firm magnifies opportunities for our people to grow, collaborate and innovate,” Miles stated. “We are proud to offer our clients these expanded resources to deliver even greater value and set a new standard for advisory services in the middle market.”
As part of the deal, private equity firm Hellman & Friedman, an existing investor in Baker Tilly, will make an additional strategic investment in the business, with existing shareholder Valeas Capital Partners also increasing its investment.
The deal is expected to close in early June of this year. Once the deal closes, Moss Adams and Baker Tilly’s audit business will combine as Baker Tilly US, LLP and the firms’ business advisory, tax and other services will combine under Baker Tilly Advisory Group, LP. Both entities will remain partnerships, with all principals holding equity alongside H&F and Valeas in BTAG.
“Since we invested in Baker Tilly, we have been focused on building a differentiated firm with the ambition to change the game in the middle-market accounting industry,” said H&F partner Blake Kleinman in a statement. “This landmark merger between Baker Tilly and Moss Adams is an important step in creating a firm that will be the destination of choice for the industry’s best talent and for firms considering their strategic options in a rapidly evolving sector.”
Former AICPA president and CEO Barry Melancon
Simpson Thacher & Bartlett LLP and Vedder Price PC served as legal advisors to Baker Tilly. Deutsche Bank Securities Inc. served as financial advisor and Dechert LLP as legal advisor to Moss Adams.
Baker Tilly is part of the Baker Tilly International network, based in London, which reported $5.6 billion in worldwide revenue in 2024. Baker Tilly has done several acquisitions since receiving
Last May, it merged in
Moss Adams does not do M&A deals as often, but last December, it entered the Salesforce.com consulting market by acquiring
International accounting and consulting firm KNAV Advisory added U.K.-based firm Aventus Partners, effective April 4.
The deal strengthens KNAV’s operations in the U.K. and continues its international expansion strategy. Last year, it integrated Natarajan & Swaminathan in Singapore and HLG Netherlands.
“This is a major milestone for KNAV’s UK operations,” KNAV CEO Nishta Sharma said in a statement. “It reinforces our commitment to a unified, integrated model that delivers exceptional value to global clients.”
KNAV reported $21.5 million in revenue in 2024 and has three offices, 12 partners and 202 employees. It was one of the
Aventus, with $5.3 million in revenue, provides audit and assurance, tax advisory, financial reporting and outsourced finance team services. The deal adds four partners and 27 employees to KNAV.
Both firms are members of Allinial Global, a global association of independent accounting and consulting firms.
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