A new spending bill from the GOP is making waves in the sports world. The bill, which recently passed in the House, proposes to cut tax breaks for sports team owners by 50%. This change could slow down the rapid pace at which wealthy individuals acquire NBA and NFL teams.
Since 2004, team owners have enjoyed the ability to write off the full value of intangible assets, such as player contracts and sponsorships, over 15 years. These assets are typically a significant part of a team’s worth, offering owners hundreds of millions in deductions. However, the new bill, part of a larger 1,100-page tax proposal approved by the House, aims to reduce these write-offs for future acquisitions.
The Congressional Joint Committee on Taxation estimates that this change could generate around $991 million in revenue over the next decade. Importantly, current team owners would not be affected, but potential buyers might think twice before making a purchase. This could cool off the current frenzy among billionaires looking to buy teams.
Earlier this year, Bill Chisholm made headlines when he purchased the Boston Celtics for a record $6.1 billion. However, the new tax proposal has prompted NFL team owners to reach out to their senators, urging them to exclude similar provisions in the Senate version of the bill. Some NFL executives have expressed that the proposed changes feel punitive, suggesting that the bill is a way for President Trump to exert influence over team ownership.
The White House has pushed back against these claims, stating that the intention behind the provision is to prevent teams from overcharging fans for tickets. A spokesperson emphasized that the focus is on fairness for fans rather than on the interests of team owners.
The NFL has faced scrutiny in the past, including a nearly $5 billion judgment related to an antitrust class action lawsuit over its Sunday Ticket subscription service. Additionally, some season ticket holders have sued teams like the Houston Texans for allegedly charging them more than other fans.
With more than 40 of the world’s richest individuals owning sports teams in the U.S., the stakes are high. Collectively, these owners have a net worth close to $1 trillion. Big names like Steve Ballmer, who purchased the Los Angeles Clippers for $2 billion in 2014, are among this elite group.
As the bill moves to the Senate, the future of sports team ownership and the financial landscape for potential buyers hangs in the balance. The outcome could reshape how deals are made in the world of professional sports.