Court finds that Buccaneers used creative accounting to support claim for Deepwater Horizon compensation

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The biggest NFL bad-news dump of Memorial Day weekend relates to one team’s failed effort to profit from a distant environmental catastrophe.

The ruling denying the Tampa Bay Buccaneers’ request for $19.5 million in compensation for the 2010 Deepwater Horizon oil spill never comes right out and says it, but the message oozing between the lines of the eight-page decision is clear: The federal appeals court that resolved the issue believes the Buccaneers engaged in creative accounting in order to qualify for payment.

Because the Buccaneers fell in the group of allegedly impacted business that were the farthest away from the site of the spill (Tampa’s stadium is roughly 360 miles from the site of the spill), the Buccaneers could obtain compensation only according to a formula that requires proof of a financial loss in the months following the spill followed by a financial rebound in those same months the next year. Specifically, the Buccaneers had to locate on their books a three-month window from May through December 2010 that showed a 15-percent drop in revenue from the same three months in 2009, and a 10-percent increase in revenue during that same three-month period in 2011.

Under this “V-Shaped Test,” the Bucs found a three-month window that revealed a 15-percent loss from 2009 to 2010: May through July. The problem came from proving a rebound in the team’s financial fortunes from May 2011 through July 2011.

As noted in the post from earlier today based on the bare-bones, minimal-analysis, completely-missed-the-broader-point AP story and not the full text of the ruling, the 2011 lockout seemed to be the biggest impediment in providing an uptick in revenue during the 2011 offseason. But that didn’t stop the Buccaneers from trying.

The Buccaneers recorded on their books during the key three-month window in 2011 a major payment from NFL Ventures, the mechanism for sharing league-wide revenue. In 2010, the Buccaneers had recorded those payments in January and then in August through December — not in the months of May, June, or July. The change in accounting practices resulted in a 500 percent increase in revenue during the key three-month period, qualifying the team for benefits under the V-Shaped Test.

The Buccaneers claimed that they made the change in accounting practices at the behest of the league, but there was no evidence that the Buccaneers actually put the NFL Ventures payment on the books in 2011. Which means the payments may have been recorded at a later date, after the organization understood that a clear financial incentive existed for doing so.

“The team . . . never submitted financial statements or other evidence showing that it made and implemented this accounting decision during 2011 (as opposed to later when it learned of the requirements for a Deepwater Horizon claim),” the court writes. “The only dated financial statements have an ‘as of’ date of October 2014.”

Though the court never comes out and says it, the message is that the court believes the Buccaneers tried to manipulate the compensation system.

“So the dispute comes down to the legitimacy of the lockout justification,” the court writes. “The Buccaneers fail to support it as a valid reason to deviate from its prior practice. The team relies solely on the affidavit of its controller and repeatedly misrepresents it as recounting a directive from the NFL that teams should book NFL Ventures revenue during the offseason.” (Emphasis added.)

That’s an indirect way of saying, “Hey, Buccaneers. We know what you’re up to. You specifically recorded a massive payment from NFL Ventures during the months of May through July 2011 in an effort to qualify for something that you otherwise didn’t deserve. And we’re not stupid enough to fall for it.”

While the Buccaneers would surely disagree (a request for comment has been made to the team), three federal appeals court judges (one of whom was appointed by President Reagan, one of whom was appointed by President Obama, and one of whom was appointed by President Trump) unanimously found that the Bucs were essentially trying to pull a fast one in seeking $19.5 million from the Deepwater Horizon compensation fund.

And while it can be argued that there’s no harm in rolling the dice on payment, the end result necessarily constitutes a blow to the organization’s credibility and, all in all, a bad look for the NFL.

25 responses to “Court finds that Buccaneers used creative accounting to support claim for Deepwater Horizon compensation

  1. Hell, our government uses creative accounting, creative fact selection, creative stories, etc. Why is that a problem? Lol

  2. I live in the Tampa Bay area. The Deep Water Horizon did not effect Tampa Bay. The closet any effect came to Tampa Bay was in the Panhandle, Pensacola Beach to Navarre Beach. You can blame any lost attendance on the fact the Bucs were not competitive. I’m a Bucs fan and this was a blatant attempt to defraud. There were business that depend of the beach and sea for a living, a football franchise is not one.

    Also I wonder if the Bucs want to blame last year Red Tide outbreak on falling attendance last year? There are a lot of things to see and do in the Tampa Bay area. Put a competitive team of the field and attendance will take care of itself.

  3. I’m absolutely stunned that a corporate entity would shuffle things around and fudge numbers as a means of generating revenue and padding their bottom line.

  4. alongthegulf says: “I live in the Tampa Bay area. The Deep Water Horizon did not effect Tampa Bay.”
    ———————–

    For the record, the Tampa Bay Lightnings filed a similar claim and received $800,000, so the spill DID affect your area. Just because the spill was 300 miles away, many collateral damage affects residents and businesses far away too.

  5. Clearly this was an attempt to defraud. But there’s the thing, until there is some disincentive for entities to try and grab money they don’t deserve, it will keep on happening. The Buc’s should be ashamed of themselves for their actions which attempted to take money from the people who were actually hurt by this very real disaster.

    As a Pats fan, I don’t take much notice of the Buc’s. But for this season at least, I will actively root against that organisation. The fans of the Tampa Bay area deserve better.

  6. If they used “creative accounting” then they should be charged with fraud.

  7. Tampa Bay is a dump, and the fan base is a bunch of surly, drunk, redneck degenerates. With that digression being said White collar crime largely and oddly goes unfettered, unabated, and unpunished in this country while corner store robberies get severely prosecuted with far less collateral damage. It makes no sense but it’s the society we live in.

  8. alongthegulf says: “I live in the Tampa Bay area. The Deep Water Horizon did not effect Tampa Bay.”
    ———————–

    The oil spill itself did not show up on the beaches or harbors, but the worldwide media blitz absolutely curtailed tourism during that time frame, and we all know that half the fans at Buccaneers games are tourists rooting for the visiting team.

    With that said, I’m sure the Buccaneers cooked the books because the ownership has absolutely no integrity; however, Florio’s claim that this incident constitutes a blow to the organization’s credibility is ridiculous. This organization has had absolutely zero credibility since Malcolm Glazer fell ill in the mid 2000’s and his idiot sons took over the franchise and fired Jon Gruden.

  9. “Tampa Bay is a dump, and the fan base is a bunch of surly, drunk, redneck degenerates. With that digression being said White collar crime largely and oddly goes unfettered, unabated, and unpunished in this country while corner store robberies get severely prosecuted with far less collateral damage. It makes no sense but it’s the society we live in.” Ignorant, plain ignorant

  10. “For the record, the Tampa Bay Lightnings filed a similar claim and received $800,000, so the spill DID affect your area. Just because the spill was 300 miles away, many collateral damage affects residents and businesses far away too.”
    _________________-

    That or the Lightning were better at defrauding. Take your pick.

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