Late last week, it was reported that tax officials in the Philippines had filed a criminal complaint against Manny Pacquiao for failure to submit documents relating to “discrepancies” on his 2010 tax returns. We don’t know any real details about this particular case, so it wouldn’t be fair to speculate.
However, this tax problem did re-awaken a bigger issue in the world of the affable welterweight titlist. So, let’s go back a bit and take a look at the mixed-up world of Manny’s personal finances.
Manny Pacquiao’s grasp and control of an empire that has generated well over half a billion dollars is contained within six cardboard boxes filled to the brim with random receipts and hand written notes. Forbes’ 24th Richest Athlete in the World also has no idea where to find basic documents such as fight contracts, bank statements, endorsement contracts, promoter contracts, property ownership records, etc.
This is what the independent accounting firm, VisionQwest, uncovered when the 8-division titlist hired the company to review his financial dealings last year.
In its few weeks as the fighter’s financial watchdog, VisionQwest ripped the lid off the Pacquiao financial setup and gave outsiders a brief glimpse into the sea of churning, vertigo-inducing chaos that constitutes the financial status of the future hall of famer.
According to statements made by VisionQwest CEO, Michael Lodge, Pacquiao’s entire operation was in disarray with Manny’s advisor, Michael Koncz, assuming control of all money dealings in the absence of a full-time accountant or trained financial consultant. Little care was paid to accuracy as numbers, supplied by Koncz, were simply “plugged” into generic taxation forms and sent off to the IRS.
But disorder and sloppy record-keeping would be the least troublesome facts uncovered by VisionQwest.
According to the company, they also found out that Pacquiao’s advisor, Koncz, not only worked for Pacquiao, but was also working for Pacquiao’s promoter, Top Rank.
The obvious conflict of interest in having a paid advisor negotiate deals with a promotional company also issuing him a paycheck is blatant, ugly, and most definitely not to the benefit of the fighter. Although there may be some technicality by which Top Rank and Koncz can continue their arrangement, it’s also possible that this is not legal and Manny simply refuses to acknowledge or agitate the situation.
Whatever the case, this cozy business arrangement does to the spirit of the Muhammad Ali Boxing Reform Act what Larry Holmes did to Ali, himself. It also may explain the reason why Pacquiao’s likeness and all endorsement deals are now in Top Rank’s full control–an unprecedented move in sports business that some poorly-informed bloggers characterized as “saving” Pacquiao’s brand name.
If VisionQwest’s description of Team Pacquiao’s financial situation is accurate, it paints a troubling portrait of a fighter kept just solvent enough to maintain his luxurious lifestyle, but one who has no idea where his money actually is or what’s being done to it by members of his own management team. He may not even have a clear idea of what his earnings actually are.
Throughout the initial stages of the investigation, the accounting firm found Top Rank uncooperative in forwarding crucial statements and documents. When they took it upon themselves to dig for the necessary documents at the offices of the Nevada State Athletic Commission, Top Rank CEO, Bob Arum, reportedly flew into a rage and personally called the commission to complain. Shortly thereafter, and just days prior to a scheduled meeting with Pacquiao, VisionQwest was fired by Pacquiao and Koncz.
Reports are that the firm was planning to reveal major record keeping inconsistencies as well as “ridiculous amounts of money” being paid to Koncz, but that information is lost in the mist and in the footnotes of VisionQwest’s breach of contract lawsuit against Pacquiao.
The company did report, though, that Pacquiao was “distraught” over the preliminary findings shared with him shortly after they began their work. VisionQwest also reported that Pacquiao told them he would hold off on taking any action until he could get the advance pay from his upcoming bout with Juan Manuel Marquez because, presumably, he needed the money.
Now, post-VisionQwest, some are starting to say that the other shoe has indeed fallen and that Manny is actually cash-poor most of the time.
Earlier last year, citing official documents from the House of Representatives in the Philippines, The Boxing Tribune reported that Pacquiao’s net worth was a mere $26 million. Despite the fact that the information came directly from documents filed by Pacquiao, himself, Manny scoffed at the idea and his management team quickly moved to discredit the report.
However, VisionQwest reported that the fighter was unable to pay their upfront fee and asked if he could pay later, after receiving his advance for November’s Marquez bout. Pacquiao would even borrow money from the accounting firm in order to purchase a home for Koncz.
To add fuel to the fire, trainer, Freddie Roach would characterize Pacquiao as “broke” in a conversation with filmmaker, Brin-Jonathan Butler late last Summer.
The reality regarding the state of Manny Pacquiao’s finances is buried deep in the chaos of Team Pacquiao, but enough has been said and reported to paint a fairly bleak picture. Manny, like too many prize fighters before him, appears to be a fighter living on IOUs and the promise of future earnings.
The idea, in case you’ve never been around the nastier side of the boxing business, is to keep the fighter always dependent on the paycheck to come, thereby guaranteeing upcoming fights for the promoter and eliminating Floyd Mayweather-style retirements after each grueling payday. Sadly, one day there are no more fights and the boxer, who sacrificed everything to earn his living, actually finds himself in debt.
The reported discrepancies on tax forms filed in the Philippines shouldn’t be a surprise to anyone who has followed the occasional snippets of information coming from Pacland. More and more, Manny’s financial set-up is looking like the absolute worst case scenario.
Hopefully, there is someone, somewhere, in Pacquiao’s life who can stop the inevitable from happening.
You can email Paul at paulmagno@theboxingtribune.com or watch him as he congratulates himself for never having pursued membership in the BWAA. Paul is a full member of the Burger King Kids’ Club, a born iconoclast, and an ordained minister in the Universal Life Church.
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