The Joe Pomp Show The Billionaire Tax Trick Fueling Record-High Sports Valuations
Aug 8, 2025
Discover how a billionaire tax trick is driving record-high valuations in sports franchises. The discussion reveals how team owners lobbied against tax provisions that could threaten their wealth. WNBA franchises are seeing surprising increases thanks to visibility and tax incentives. Learn about the loopholes billionaires exploit by classifying team purchases as depreciating assets, and the potential fallout if these tax benefits were to change. It's a fascinating look at the intersection of sports, finance, and politics!
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Sports Teams As Tax Shelters
- American sports teams act as a tax shelter for billionaires due to amortization rules.
- This drives buyers to pay inflated prices beyond operational economics.
15-Year Amortization Mechanics
- Buyers allocate most of a purchase to intangible assets and amortize them over 15 years under Section 197.
- Those annual deductions can create paper losses that offset personal income for owners.
Steve Ballmer's Tax Example
- Ballmer's $2 billion Clippers purchase generated deductions that lowered his federal tax to $78 million that year.
- That translated to an effective federal rate near 12%, far below many employees' rates.