Are sponsorship contracts worthwhile?

General discussions about the 1st version of Tennis Elbow Manager

Are sponsorship contracts worthwhile?

Postby Laskaris » 09 Nov 2014, 11:35

One thing I don't understand about the sponsorship contracts in TEM is that they seem to cost the player more money than they earn him. For instance, I am being offered a sponsorship contract with "Babe-ola" which is worth $ 375.000, plus a bonus of $ 125.000 for winning a Masters tournament or above, plus free equipment. But it costs 30% taxes to prize money, which means that, overall, the deduction in prize money during the 1-year running time of the contract is much higher than any benefits of the deal.

What is up with that? Is this working as designed? The impression I get is that players make more money by never signing a sponsorship contract.
Laskaris
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Re: Are sponsorship contracts worthwhile?

Postby manutoo » 10 Nov 2014, 04:08

Hello,

you get a 30% tax cut on all your income ; it's a very simple model to simulate tax cut (in real life the amount depends of the country where you got the money).
So you lose that 30% even if you don't have sponsor.
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Re: Are sponsorship contracts worthwhile?

Postby Laskaris » 10 Nov 2014, 09:52

So the sponsorship contract does not cost any taxes in addition to the ones the player is already paying? Then why does it say "Taxes: 30%" under the sponsorship contract? I think the current system is confusing.
Laskaris
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Re: Are sponsorship contracts worthwhile?

Postby manutoo » 11 Nov 2014, 05:11

Ooops, I had forgotten about the taxes for sponsor.
So the 30% tax cut is for high level tournament.
For sponsor contracts, the tax cut is shown on the sponsor page. If it says : total bonus of $5000 with 10% taxes, it means you'll get exactly $4500 from your contract. And it doesn't influence the tax level of your tournament prizes.
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