Sports Law Blog
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Sunday, December 22, 2013
If Facebook’s Zuckerberg Was A Sports Fan What Would He Do With His Billions In Charity?
I am not the one to tell someone how to spend his or her money. But if it is acceptable to dream about winning the lotto, it’s still OK to imagine a movie on how a nerdy Harvard dropout became the richest youngster in the world, and then had a sports epiphany. If done well, it could top Adam Sandler’s golf dreams in Happy Gilmore. So in the most unusual of dreams, and without a man-crush, and like most good comedies, there is a touch of reality.
The reality is that billionaire Zuckerberg is so rich he has a tax bill bigger than many city budgets. He has the acumen to say something like, “OK, I am not going to use my cash to pay the IRS. It hurts at a visceral level to do that – and I have choices.” Rather, SEC filings reveal a complex transaction where he will take advantage of Facebook’s doubling in stock price since January 2013 to pay those taxes and donate to education, including the local school district around Facebook’s headquarters. His wife is a teacher and influenced him to teach as well.
The plan is that he will exercise his options on 60 million shares, sell 41.35 million of them to pay capital gains taxes he will have on the transaction. He had the option to buy at – get this – 6 cents a share. That will net him about $1 billion. Then by donating about 18 million shares ($990 million in value) to a nonprofit, he can save the same amount in taxes – i.e. a little-known dollar-for-dollar tax benefit under a certain adjusted gross income threshold.
But what if his passion was for sports, not teaching? Or why not a passion that weds the two? My movie (which I am writing and is already copyright protected) has him playing touch football, getting knocked unconscious, having a concussion and then having the following epiphany:
“I am providing a matching grant to the NFL, NBA, and MLB and their respective players associations if they amend their collective bargaining agreements (“CBAs”) to mandate two items noted below.
First, 10% of the player salaries will be allocated to certain education-related designated charities designed to equalize opportunities. Many inner city and Appalachian-like rural schools are severely under-resourced compared to suburban schools, with teachers buying materials from their own pockets without comparable technology.
Second, to the maximum extent permitted by ERISA laws, player salaries over a certain multi-million dollar threshold are placed in a trust fund or a vetted deferred compensation plan. That appears to be the most immediate way to reverse the sad statistic that approximately 60% of the NBA players file for bankruptcy protection after retirement. That way, the CBA can protect the athletes from themselves, and redirect their futures away from being an impending lost resource and into a future family and community asset. Hence, a burgeoning class of New Age Athletes.
These provisions are legal because the players have to agree to it, so it is voluntary. It is also likely immune from any antitrust concerns of third-party contractors who provide financial services to the players or the leagues because the clauses fall within the well-established nonstatutory labor exemptions for collectively bargained items.
Sometimes dreams come true. Even business plans start with imagination – a vision of what can be, not what already is, a reality.