Sports Law Blog
All things legal relating
to the sports world...
Sunday, August 08, 2004
 

New Bill Would Create Tax Break for Team Owners: A new bill being considered by Congress would have an unforeseen, but large, impact on the tax bills of the owners of sports franchises. The bill, which began as a measure to settle a trade dispute with the European Union, now has a number of riders and amendments benefiting a number of special interest groups.

One portion would allow sports franchise owners to write off the full value of their franchises over 15 years. Existing law generally limits teams to writing off only the value of player contracts over three to five years. The biggest items subject to the expanded write-offs would be television and radio contracts. The break would only apply to new assets, meaning that current owners would not benefit until they sold the teams. The thinking in the industry is that the tax incentive will raise the value of teams, increasing the sale prices. Many current owners, as well as a number of the professional leagues, lobbied Congress for the change.

This seems to be yet another example of the rich getting richer. Professional sports teams already benefit from a number of public subsidies, including publicly funded stadiums, and tax breaks. This change will cut the taxes of some of the nation's richest individuals, which ultimately hurts the nation as a whole. There is no danger of professional sports crumbling anytime soon due to the taxes being paid, so it is hard to see any benefit in this proposal other than campaign contributions.