You’re Subsidizing Sports More than You Know

2017 October 12
by bc3b

We’re all familiar with taxpayer-funded stadiums and arenas, but it appears that is just the tip of the iceberg. It also appears that there are other favorable tax laws that virtually make buying a professional sports franchise self- funding.

The tax code has been very, very good to sports team owners.

A little-known tweak to IRS rules in 2004 has allowed new owners to write off nearly all of the purchase price of their teams against profits over 15 years.

The tax break has supercharged the increase in values of all professional sports teams, experts said.

For NFL team owners, the tax break has added roughly 5 percent to team values — or about $122 million, based on an average franchise value of $2.44 billion, according to Forbes.

The tax break, and others, and how each NFL owner has benefited from them came into focus this week after President Trump — as part of a long-running battle with the league and its players over kneeling during the national anthem — tweeted a threat about the league’s “massive tax breaks.”

“Change the tax law!” Trump tweeted.

While Trump was referring to tax breaks associated with the construction of NFL stadiums, the much more lucrative tax break is the ability of all sports team buyers to write down the value of the franchise over 15 years.

The tax law, long on the books, was significantly reshaped by President George W. Bush in 2004.

“Without a doubt, this is the tax break they benefit the most from,” tax expert Robert Willens told The Post.

Just how much?

Well, take the case of fracking billionaire Terry Pegula, who in 2014 paid $1.4 billion for the Buffalo Bills.

Pegula is able to deduct $93 million a year — one-fifteenth of the purchase price — against the team’s profits and his income for 15 years.

The Bills, according to Forbes, made $53 million last season. If Pegula earned $40 million in 2016, the Bills’ tax deduction could reduce his tax bill to zero.

Sports team owners who take the deduction have to pay it back when they sell the team — but that is likely far down the road, and may even be something children or grandchildren will deal with.

This is just one tax break owners receive. Owners can also depreciate players just as a manufacturing company would depreciate equipment.

If Colin Kaepernick accomplishes nothing else, he caused Americans to become more aware about how they are subsidizing professional sports franchises, even if they have absolutely no interest in sports. Hopefully Congress will take note.

Read more:

Hat tip: New York Post

20 Responses leave one →
  1. 2017 October 12 9:17 pm
    [1]
    bc3b permalink

    “This fricking dump of a stadium is nearly 10 years old. Build me a new one or we’ll become the third team in LA.”

    The bad thing about having two teams in the LA market is that the threat of relocating teams to LA is gone. Every home date the LA Chargers fail to fill a 27,000 seat soccer stadium that is the team’s home until 2020 and more than half the attendance is pulling for the visting team.

  2. 2017 October 13 5:50 am
    [2]
    drdog09 permalink

    Then there is the local abatements. AT&T stadium in Arlington pays just a little bit less in RE taxes that the homes that were demolished to make way for the complex. Then there was all the road improvements on I30 and 360 that the State threw at the effort, some $40m worth. It should be listed as a sex offense cause the taxpayers got raped.

  3. 2017 October 13 7:24 am
    [3]
    gnqanq permalink

    I can not understand the interest in L.A. for a football team. They don’t sell out, never really have. The Rams left once before because they could not sell out and lack of exposure there. Even SC has problems selling out when they are VERY GOOD.

    Football on the west coast does not have the same level of interest it has in the Midwest and South, where it borders on a religion here.

    Add in that the NFL has committed suicide, there is no real reason to give tax breaks or subsidies to NFL teams. Lets do what good liberals would want to do – TAX them.

  4. 2017 October 13 7:57 am
    [4]
    JimNorCal permalink

    3, exactly. They produce nothing of lasting value. Let them pay extra.

  5. 2017 October 13 9:21 am
    [5]
    bc3b permalink

    drdog09 #2 –

    So you’re saying that Jerry Jones is no better than Harvey Weinstein.

  6. 2017 October 13 9:26 am
    [6]
    bc3b permalink

    Speaking of football, don’t forget to get your BJG College Football picks in by tonight.

    Here are this week’s games. Please indicate the teams you think will win by bolding and return via email to bjgsports1@yahoo.com by 7 PM Friday.

    Northwestern @ Maryland
    Ohio @ Bowling Green
    Toledo @ Central Michigan
    Eastern Michigan @ Army
    Northern Illinois @ Buffalo

    Virginia @ North Carolina
    Rutgers @ Illinois
    Texas Tech @ West Virginia
    Michigan @ Indiana
    TCU @ Kansas State

    Florida State @ Duke
    Middle Tennessee State @ UAB
    Wyoming @ Utah State
    UNLV @ Air Force
    UCLA @ Arizona

    Vanderbilt @ Mississippi
    Oklahoma vs. Texas (in Dallas)
    Navy @ Memphis
    New Mexico State @ Georgia Southern
    Texas A&M @ Florida

    South Carolina @ Tennessee
    Auburn @ LSU
    Michigan State @ Minnesota
    New Mexico @ Fresno State
    Boise State @ San Diego State

    Georgia Tech @ Miami (FL)
    Texas – San Antonio @ North Texas
    Georgia State @ Louisiana (Monroe)

    Good luck,
    Brian

  7. 2017 October 13 9:26 am
    [7]
    drdog09 permalink

    BC, 5,

    Indeed he is. They are both Tax Suckers.

    Worse still the money the State spent for I30 improvements went for a multioccupancy high speed lane. That was open for exactly 2 months two years ago. It has been closed every since for ‘further construction’.

  8. 2017 October 13 9:41 am
    [8]
    justrand permalink

    traveling…so once again I am limited in my access to internet & news. I’m relying on y’all to keep the hordes from overrunning society until I can get back to my refuge in the mountains 🙂

  9. 2017 October 13 10:40 am
    [9]
    drdog09 permalink

  10. 2017 October 13 11:06 am
    [10]
    gnqanq permalink

    drdog – did you see this earlier in the week.

    http://www.newsmax.com/newsfront/russia-today-ads-washington-dc/2017/10/12/id/819247/

    I thought it was funny.

  11. 2017 October 13 11:32 am
    [11]
    justrand permalink

    The Russians also used Google Maps to hide Wisconsin, Pennsylvania and Ohio from Hillary’s election “brain” trust!!

  12. 2017 October 13 11:48 am
    [12]
    drdog09 permalink

    People with an IQ 90 or less represents 16% of the US population –> 51m.

    We are in trouble.

  13. 2017 October 13 12:21 pm
    [13]
    bc3b permalink

    drdog09 #12 –

    The more immigrants we take in from countries with low IQs, the more it negatively impacts our national average IQ. genetics are a fact. a racissst fact, but a fact nevertheless. Tall people usually have tall kids, athletic people have athletic kids (Cal Ripken, Jr. and Ken Griffey being examples), smart people generally have smart kids and dumb people have dumb kids.

    Since the immigration laws changed, the majority of immigrants have been coming from countries with IQs hovering around 80 (African countries, Central America, Muslim countries, etc.). Somalia is 68 and Haiti is 67. Mexico’s national average IQ is 88, but it is driven by Castilians and the people sneaking across the border are not Castilians.

    https://photius.com/rankings/national_iq_scores_country_ranks.html

  14. 2017 October 13 12:38 pm
    [14]
    drdog09 permalink

    GN, 10,

    Had not seen that before. But that is Russian humor, dry, acerbic, sometime counter-intuitive.

    Was in Russia several years ago, dead of winter, snow banks 4-5′ high. Asked the gentlemen walking with me, ‘What should I do if I slip and fall with a car coming?”

    “Prepare to die.” with a wry smile on his face.

  15. 2017 October 13 12:48 pm
    [15]
    bc3b permalink

    Actress calls out George Clooney on sexual misconduct:

    https://pagesix.com/2017/10/13/er-actress-calls-out-clooney-producer-in-misconduct-claim/?_ga=2.232276573.336266819.1507301222-1110366079.1502322682

    Stock up on pop corn and (non A-B/InBev) beer. This is gonna be good.

  16. 2017 October 13 12:52 pm
    [16]
    drdog09 permalink

    15,

    I am hoping to hear more women come forward against Kimmel. I find his smugness tasteless.

  17. 2017 October 13 12:56 pm
    [17]
    bc3b permalink

    NFL NOT seeking mandate for players to stand:

    https://ca.reuters.com/article/canadaSportsNews/idCAKBN1CI24Y-OCASP

  18. 2017 October 13 1:17 pm
    [18]
    drdog09 permalink

    Don’t read this screed on a full stomach — http://thehill.com/opinion/campaign/355159-steve-bannon-democrats-unlikely-new-friend — This is so convoluted that the author ought to be institutionalized.

  19. 2017 October 13 2:19 pm
    [19]
    JimNorCal permalink

    16, and only last week Kimmel was “America’s Conscience” LOL

  20. 2017 October 15 4:39 am
    [20]

    9 – They are so desperate to save this fictitious narrative, even pokemon is fair game now hahahaa .

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