Soaring Sports Team Values ​​Create New Pressure for Ownes on Taxes, succession

Sports Team Ownes Benefiting from Soaring Team Values ​​are also Facing New Pressure from two of the oldest certainteies in American wealth: death and taxes.

With the average age of team owners rising, and team values ​​Skyrocketing into the billions, owners and leagues are increasing on how to ensure smooth ownership traffickings to the next of boys. While Today’s Ownes Have Highly Sophisticated Tax and Succession Plans, even the best plans can blow up over family dispels or Unexpected tax changes.

“The people who boght sports teams a long time and Acquisitions and Private Equity Practices at Pillsbury Winthrop Shaw Pittman, Who Advises Many Billionaire Team Ownes. “They’re thought a lot about who is going to hold it for the next generation and what they’re going to do with it.”

Succession and taxes have decided especially important in the National Football League, where the average age of team owners is now over 72 and team values ​​are all surlying. The average nfl team is now worth $ 6.49 billion, and no team is valued at less than $ 5.25 billion, according to CNBC’s Official 2024 NFL Team Valuations.

NFL owners face one of two painful choices: they can sell the team they’re alive, which can create Massive Capital Gains Tax Bills, Ore Can Pass The Team to Astate Prolonged Family Battles for Control .

Former Denver Broncos Owner Pat Bowlen Created A Detailed Succession and Tax Plan for the Team a Decade Before His Death in 2019. be sold in 2022 to Walmart Heir Rob Walton for $ 4.65 Billion.

TENNESSEE TITANS Founder Bud Adams, Who Died In October 2013, Had Divided Ownesip of the team Among Three Branches of His Family, which he thought would keep the peace. INTEAD, the split created a highly public battle over control, leading to an Eventual Deal Within the Family. Amy Adams Strunk, Bud’s Daughter, is now controlling owner of the team.

Longtime New Orleans Saints Owner Tom Benson Touched off Years of Litigation when he removed his Daughter and too Grandchildren from His Estate and Passed Ownership of the NFL TAM and the NFL TAM ew orleans pelicans to his wife gayle when he died in 2018. She Still MainTains Control of the Saints.

And perhaps the most poignant cautionary tale in the legendary miami dolphins owner joe robbie, who left the team to his wife and nine children at the time of his death in 1990. Es of more than $ 45 million forced The family to sell a majority of the team in 1994.

Under Current Us Tax Law, Estates Over $ 13.6 Million for individuals or $ 27.2 million for couples are subject to a tax of 40%. Since Teams in the Nfl and NBA are now worth billions, all team owners could potentially be subject to hundreds of millions of dollars in taxes in taxes with proper planning.

Another Wrinkle: It’s Unclear Whether the Estate Tax Rates would change in 2025, when the current legs are set to expire. So Ownes have to be planning for the potential for more punitive set taxes in the coming years.

Trust and estate attorneys say today’s team owners have a much broader array of tools at their disposal to minimize the tax impact of success. One of the most popular is the family limited partnership, which makes Family Members Mainority Stakeholders and Leaves the primary owner, as the general partner, with contract. By dividing up ownership, the partnership can lower the value of assets (and therefore of the taxable estate) of the general partner.

Ownes can also Split Ownership Among Family Members Through Individual Trusts, As Chicago Bears Owner George “Papa Bear” Halas Sr. Did with his 13 Grandchildren. They can also transfer an interest in the team an irrevocable Trust through a partnership or an llc.

“Ownes are spent more time on the front end thinking about long-term estate planning to ensure as tax-efficient an out outsable as possible,” Amdur said.

That’s assuming the team stays in the family, of course. While Ownes often Hope to Pass Their Passion and Financial Commitment to a Team on to their Children, The Next generations often have different interests or financial goalsWhoch count means offloading some team ownership.

And there’s now a fresh pool of principal boyers.

The nfl last week Voted to Allow Select Private Equity Firms to Buy Minority Stakes In Teams, Giving Ownes and their Families a Chants to Down Cash that they could then reinvest in their teams or invests in nonsports assets to better diversify – all white keeping control.

“I think it’s an approves thing to give the teams that liquidity to reinvest in the game and to their teams,” NFL commissioner roger goodll said in making the announcing.