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Murphy’s Latest Ad Makes Questionable Claims About WWE

by Christine Stuart | Aug 27, 2012 4:15pm
(19) Comments | Commenting has expired
Posted to: Congress, Election 2012

(Updated 9:42 p.m.) U.S. Rep. Chris Murphy is swinging back against Republican Linda McMahon in his latest television commercial, but the claims he makes against for the former CEO of the WWE are questionable.

The ad opens with this statement: “As CEO of World Wrestling Entertainment, Linda McMahon had a plan. Shift profits overseas to avoid U.S. taxes.”

The citation flashed at the bottom of the page is the WWE’s 2009 10-K form, which is required by the Securities and Exchange Commission. It gives a comprehensive summary of a public company’s performance.

The Murphy campaign said the reference is to $4.1 million in unremitted earnings to the United States. According to the 2009 10-K, those unremitted earnings were reinvested overseas. The WWE is a worldwide company and its operations overseas grew by 27 percent in 2009.

“In 2009, we held 74 live events internationally, reaching approximately 600,000 fans at an average ticket price of $66.08. These events were spread over several successful international tours throughout Europe, Latin America and Australia,” the report says. “Any additional U.S. taxes payable on the remaining foreign earnings, if remitted, would be substantially offset by credits for foreign taxes already paid.”

Murphy’s campaign maintains that that means it shifted profits overseas in order to avoid paying taxes.

“Like any global company, WWE has working capital outside the United States for standard business operations such as payroll and marketing expenses,” Brian Flynn, senior vice president of marketing and communications for the WWE, said. “In 2009, WWE allocated only 3.5 percent of its $127 million in international revenue to accounts to cover such expenditures. Further, in 2009 WWE paid an effective U.S. tax rate of 37 percent, which was in line with the U.S. statutory rate, and almost 30 percent higher than the average effective tax rate for U.S. companies, which was 29 percent.”

The McMahons’ 2010 and 2011 taxes show that she and her husband, Vince, who is now in charge of the company, kept no money in what would be considered a “tax haven” country such as the Cayman Islands.

“Perhaps Congressman Murphy should take a few courses in international business where he would learn all about how international companies earn profits internationally and pay their taxes to the countries in which they are doing business,” Corry Bliss, McMahon’s campaign manager, said. “I suppose we shouldn’t expect Chris Murphy to understand these issues though, since he has never really had a job in the private sector.”

 

The next claim in the ad says McMahon denies “employees healthcare and disability . . . to increase her profit.”

The Murphy campaign said Friday that the statement refers to wrestlers who perform in the ring. But the ad neglects to mention that the wrestlers are independent contractors, rather than employees of the WWE.

“All 700 full-time WWE corporate employees have health insurance. All WWE performers also have health insurance,” Flynn said Monday.

“As part of their contract with WWE, talent are required to have health insurance. That said, WWE pays for all medical treatment related to any in-ring related injuries and associated rehabilitation costs required to assist a performer with his or her recovery,” Flynn explained.

The average salary for a full-time “superstar” is $250,000 a year, and none of the performers make less than $100,000, “enabling them to afford standard health insurance, especially since WWE covers costs for any in-ring related injuries,” Flynn added.

The Murphy campaign cites the number of wrestlers who have prematurely died while they were working for the WWE. The campaign also cites a deceased wrestler’s contract that shows that the talent is contractually required to purchase health insurance and must work for the WWE exclusively during the length of their contract.

“If they’re only allowed to draw a paycheck from one source, how are they not employees?” a Murphy campaign spokesman inquired.

A confidential audit concluded in 2011, long after the first U.S. Senate match-up between McMahon and then Attorney General Richard Blumenthal, found that the company owed about $7,000 in unemployment benefits to some of its employees. The WWE disputed the findings, but paid the fine under protest.

The audit was confidential so it’s unclear if any of the wrestling talent fell under that category.

The WWE’s wellness fact sheet says since 1982, five wrestlers have died while under contract with the WWE.

“According to coroner reports, one individual died by accident, one by suicide and three by heart disease. Other deceased wrestlers referred to in various reports were either not affiliated with WWE at all or performed for other wrestling organizations after their contract with WWE expired,” the statement on the WWE’s website says.

The next claim in the Murphy ad is that McMahon’s plan cuts taxes for the wealthy. McMahon’s published plan says she would lobby in Washington to cut taxes on earned income for the middle class. Her plan does nothing to the upper income brackets regarding earned income, but it assumes the Bush tax cuts will remain in place. It taxes capital gains and dividends tax at 15 percent, which is the current rate.

If the Bush-era tax cuts are permitted to expire, the tax rate on capital gains and dividends would more than double, reverting to 39.6 percent. Using the McMahon’s 2010 tax filings, this would cost her an extra $7 million in taxes, according to the Murphy campaign. Most of the McMahons’ income in 2010 and 2011 came from capital gains and dividends. But her plan would not change her current tax rate. The claim in the ad is dependent upon the Bush tax cuts and whether a person believes they will remain in place or expire.

McMahon has said she doesn’t believe the Bush-era tax cuts should end for anyone, including the middle class or the wealthiest individuals.

The ad goes onto say McMahon’s plan makes “cuts to Medicare and education.”

This does not appear to be true, but it depends on whom you believe. Based on McMahon’s website. McMahon would pay for her middle class tax cuts with a 1 percent reduction in spending. The reduction would not include any cuts to Medicare or defense spending.

The ad’s statement about McMahon’s plan cutting Medicare and education also appears to ignore statements to the contrary by Bliss, McMahon’s campaign manager. According to the Murphy campaign, the accuracy of the ad on McMahon supporting cuts to Medicare depends upon whether you believe McMahon herself, or Bliss.

Ben Marter, Murphy’s spokesman, points out that McMahon has said repeatedly she’s considering cuts to Medicare. After U.S. Rep. Paul Ryan became the vice presidential nominee, Bliss said McMahon will not support cuts to Medicare.

Todd Abrajano, McMahon’s spokesman, said that whether McMahon said it or the campaign said it, she’s not going to cut Medicare and that’s the bottom line.

But McMahon told the New Haven Register two days after Mitt Romney chose Ryan as his running mate that she wouldn’t rule out Ryan’s approach to Medicare, which contradicts what her campaign said. Making it a claim that could go either way.

As for the rest of the spending reductions in McMahon‘s plan, she has never said she would cut education funding. She also refuses to say exactly where she would cut the budget, even though she has said she wouldn’t touch defense spending and Bliss has said she wouldn’t touch Medicare.

Murphy’s latest ad was released following several from McMahon criticizing his attendance record. Records show that Murphy has attended 97 percent of his votes as a member of Congress, but the McMahon ads cite poor attendance at hearings during which no votes take place.

Former Republican Congressman Rob Simmons suggested last week that McMahon’s lack of experience in public office may be coloring her rhetoric. He said that lawmakers who sit on multiple committees and subcommittees often have scheduling conflicts, forcing them to either choose one and skip the other, or to try to split time between the groups.

Further, lawmakers often send staff to cover meetings that they can’t attend, and it’s worth noting that Congress was not in session during the October 2008 meetings on the financial crisis referenced in McMahon’s attack ads.

Nevertheless, the message in McMahon’s ads seems to be resonating, with the latest Rasmussen poll showing McMahon with a slight lead over Murphy. Tomorrow Quinnipiac University will release its poll on the U.S. Senate race in Connecticut. Stay tuned…

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(19) Comments

posted by: Not that Michael Brown | August 27, 2012  5:04pm

I rate this anti-McMahon ad as ‘mostly truthful.’

posted by: jenand | August 27, 2012  7:04pm

If MacMahon is ahead, or, God Forbid, wins,it will be because Connecticut’s hedge fund managers, and old money millionaire+‘s just care about protecting their booty.

posted by: Kevin of Minnesota | August 27, 2012  7:33pm

Christine, your questioning of McMahon’s Medicare and education cuts is inaccurate.  The cuts were mentioned in a 2010 interview just before election recent interview of the New Haven Register, which Murphy accurately sourced.  This report is flawed and disgraceful.

posted by: Kevin of Minnesota | August 27, 2012  7:37pm

Mentioning her 2010 and 2011 tax records does not consist with her 2009 records at all.

posted by: Kevin of Minnesota | August 27, 2012  7:41pm

Also, not all wrestlers are independent contractors and many of those ranked mid-card and beyond are under contract.  One example showed with Owen Hart and Mick Foley following the Montreal Screwjob.  They tried to leave the WWF in protest but couldn’t because they were under contract

posted by: CitizenCT | August 27, 2012  7:49pm

Murphy’s ad is the least truthful since Bysiwiecz claimed Murphy was the biggest recipient of Hedge fund money.  Murphy should follow his own advice and pull his commercial off the air immediately.

posted by: Christine Stuart | August 27, 2012  7:57pm

Christine Stuart

Kevin of Minnesota,
You apparently missed this sentence: But McMahon told the New Haven Register she wouldn’t rule out Ryan’s approach to Medicare, which contradicts what her campaign said.

posted by: Kevin of Minnesota | August 27, 2012  7:59pm

That poll that showed her in the lead was also conducted by Rasmussen Reports, which is known to bias towards favoring Republican candidates

posted by: Kevin of Minnesota | August 27, 2012  8:12pm

Christine, I didn’t miss the sentence about Paul Ryan.  I was criticizing the fact that you claimed “this does not appear to be true.”  I come from one of the biggest wrestling fan-bases in the country and I do my research on the WWE.  I even used to be a big fan between the years 1999 and 2008.  I am also among a growing crowd which doesn’t appreciate news that is based from the dishonest sensationalism that was revolutionized by William Randolph Hearst.  The media needs to learn that consumers are getting smarter and the suck-born-every-minute strategy is dying.

posted by: Kevin of Minnesota | August 27, 2012  9:06pm

I would like to lastly complain about the salary comment.  While they have on occasion offered for former, they don’t exactly have a pension or highly valid Social Security program to cover at least $100,000 for them after they leave the company either. Some of them, such as that former wrestler Jim Harris (Kamala), have wound up poor or back on a standard class salary.  If you do a little on Kamala, you’ll find he recently had his leg amputated and has a few of his friends recently started a charity drive to pay for his financial state.  The wrestlers don’t even get guaranteed a safe working environment as they have no labor union and don’t fall within NLRB bargaining rights

posted by: Todd Peterson | August 27, 2012  9:10pm

Kevin is trotting out the same old crap about Rasmussen.  The fact is that in 2008 Rasmussen hit the results of the Presidential election on the bullseye in a year when the Dems won big. When Rasmussen shows the Dems winning big, they’re right. If the Republicans have momentum, then they’re biased.  Pathetic…

posted by: Christine Stuart | August 27, 2012  10:00pm

Christine Stuart

Kevin of Minnesota,
We received tons of criticism last week for talking to an economist about McMahon’s plan, which he said won’t necessarily work and would drive up the federal deficit. We are being even handed here and I can honestly say we have not favored one campaign or the other. Here’s the link to last week’s story

posted by: Kevin of Minnesota | August 27, 2012  10:11pm

Todd, I’m afraid you are mistaken about Rasmussen. Their 2010 results did show exaggerated favor towards Republicans.  In 2010, Nate Silver, who had praised them in 2008, changed his view and accepted criticism of the group.

posted by: skyrocket27 | August 28, 2012  9:20am

No one should be surprised that Congressman Murphy, after 8 years in Congress, would avoid running on his own record and would rather create and endorse half-truths (at best) and lies about his opponent.

Given his record of failing to show up for the job residents of Connecticut’s 5th district elected him to 80% of the time, and when he did grace the halls of Congress, his policies resulting in 8%+ unemployment, historically record deficit spending and cutting Medicare.

Congressman Murphy should realize a similar fate as the one his policies have put far too many Americans in, he should be given his “pink slip.”

posted by: Todd Peterson | August 28, 2012  9:46am

A few weeks back I checked out a study by a professor from the Midwest that concluded that out of about three dozen polling outfits Rasmussen was the most accurate in the 2010 race.

The Q-poll just released today has the same margin as the Rasmussen poll with a much larger sample.  For the record, I voted for Shays in the primary and voted for Dr. Mertens two years ago. These two most recent polls are a real surprise to me.

posted by: CT Jim | August 28, 2012  10:12am

Todd is right Rasmussen did have the presidential finally tally pretty well spot on but it also called for a very tight senate race putting the race at 7 points with 2 days to go and claim it would tighten even more. Blumenthal won by 12. Maybe their presidential poll is better but checking thier polls on senate and congressional races are not quite so good and the fact is the Q poll has shown their method is shakey at best, didnt they have Lamont beating Malloy and Murphy leading by about 15 going into election day and he ends winning 2-1

posted by: CT Jim | August 28, 2012  10:23am

One other thing yes Rasmussen bends towards republicans but there are polls that bend democratic too. So you do as most of do you look at the dem one and the rep one and figure the real number is somewhere in the middle

posted by: gutbomb86 | August 28, 2012  10:38am

gutbomb86

Here are two posts from statistician Nate Silver outlining previous problems with Rasmussen’s polling:

Nov. 4, 2010

and

Feb. 21, 2011

Note, the second post says Rasmussen overestimated Republican support by 4% during the Fall 2010 election cycle. Everything you need to know about how Rasmussen conducted its polling during that particular cycle is in those posts. That’s not to say the error still exists today in current Rasmussen polling. It might or it might not. No one commenting here knows one way or another.

posted by: Kevin of Minnesota | August 28, 2012  10:44am

Todd, Real Clear Politics showed covered all major pollsters and showed Rasmussen’s bias in 2010.  They even predicted that Hawaiian Senator Daniel Inouye would when win by 12% when had won by 53 That Quinnipiac poll was also questionable, as it only involved likely voters and was conducted over a period of five days, which is enough time for some of these surveyed voters to change their mind.  In my home state of Minnesota, the local polls in the 1998 governor’s race were highly flawed because they were based on surveys from likely voters and not registered voters.  They suggested the election was a tossup race between Skip Humphrey and Norm Coleman and that Jesse Ventura would lose by a wide margin