Some of the wealthiest team owners in professional sports manage to reduce their tax burdens since purchasing their team. According to ProPublica, some owners deducted nearly the entire purchase price from taxes on future earnings. As a result, these owners have seen their teams increase in value each year since purchasing their teams.
Los Angeles Clippers Owner Steve Ballmer purchased the team in 2014. Since his purchase, the Clippers’ value has doubled during Ballmer’s run as the team’s owner. Ballmer paid 78 million in taxes in 2020, which has a federal income tax rate of about 12 percent.
This is the case for many owners across sports whose net worths are over a billion dollars. For example, David Tepper, the Carolina Panthers owner, has seen the team’s value and personal net worth increase since purchasing the team. He purchased the Panthers three years ago, and the value has only gone up, even with a lack of team success.
Some of the wealthiest team owners have reduced their tax burdens to rates lower than those paid by the players. Most of these owners are successful business minds and have built their worth from previous companies. As a result, they run their organizations like a business, and the value is only going up.
It doesn’t matter how successful the team is for it to be high in value. The Clippers have never been to the NBA finals, and the Panthers haven’t made the playoff since 2017. However, the owners are still finding a way to benefit the team’s fortune and themselves.
Other owners who have been successful with this strategy are Dan Gilbert and Shahid Khan. Gilbert is the owner of the Cleveland Cavaliers, and he has seen the team’s value double since his purchase in 2005. Even though Cleveland hasn’t been competitive since Lebron James left, the team is still finding ways to increase value.
The same goes for Khan. He owns the Jacksonville Jaguars, who managed one win in 2020. Since his purchase, the Jaguars have been to the playoffs one time. However, the team’s value has increased to over two billion dollars.
Many owners, especially those worth billions, are enjoying these tax breaks. Some of the wealthiest men in the world are finding ways to pay low rates despite how much they are worth.
Some of the wealthiest owners in professional sports are using the United States Tax Code to their advantage. By running their organizations like other businesses, they have increased the value of their teams and their own personal net worths in the meantime.