The News
The tax bill passed by House Republicans last week would close tax loopholes for owners of sports teams, a group that includes many of President Donald Trump’s biggest backers. They would no longer be allowed to deduct the entire value of player contracts, sponsorship deals, and media rights — huge inputs into increasingly eye-watering prices being paid for teams — from their future personal taxes.
The bill, which faces tweaks in the Senate, would limit those deductions to 50%, which congressional accountants estimate would raise $991 million in additional tax revenue over the next 10 years. (Compare that to an estimated $10 billion that might have been raised by changing tax treatment of carried interest, another perk close to the hearts of the billionaire set.)
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Liz’s view
Sports teams are the new trophy assets. They are also lucrative tax shelters: ProPublica, as part of its 2021 series based on thousands of leaked tax returns, found that Los Angeles Clippers owner Steve Ballmer saved $2 billion on his personal taxes thanks to this provision, paying a lower tax rate than a concessions worker in the team’s arena.
Any change to the tax code that doesn’t grandfather in existing owners would be bad news for, among others, Josh Harris, who led a $6 billion deal for the Washington Commanders; Bill Chisholm ($6.1 billion for the Boston Celtics); and Steve Cohen ($2.4 billion for the New York Mets).
Notable
- Trump has chided the NFL over many years, The New York Times reported. He downplayed the seriousness of concussions and, in 2017, called on owners to dismiss players who protested racial injustice and police brutality by refusing to stand for the national anthem.