Tuesday, November 18, 2014

Billionaire Sports Ownership...not just for getting the taxpayers to build 'em stadiums anymore

Nothing begats success more than owning an unsuccessful franchise, A few months ago Steve Balmer purchased the Los Angeles Clippers (lifetime .379 winning percentage) for $2 billion or so.

What's he get out of is other than being a dancing fool?

More than you may realize.

Buying a team isn't like buying a factory full of machines; Ballmer got few physical assets for his $2 billion. Instead, he paid top dollar to join a successful league and acquire the rights to a star-studded roster.

The IRS offers specific tax breaks to any business loaded with such intangible assets.

So, in addition to taking a normal deduction for Paul's annual salary, Ballmer could claim the point guard is worth additional millions in terms of selling tickets and driving broadcast revenue.
This added value, he could say, was part of the original purchase price. The IRS would then allow him to amortize a significant portion of the $2 billion over 15 years in much the same way a factory owner depreciates aging machinery.
Must be tough making such a sacrifice.


Anonymous said...

"Must be tough making such a sacrifice. "

And don't you forget it. It's really hard for the top 10th of the top 1%.

Anonymous said...

In addition to the tax breaks, let's not forget that the NBA and other professional leagues function as monopolies/cartels...which should go a long way in ensuring Ballmer's asset. Hell, Sterling paid, what, $2million for the team in 1982...which, even after inflation, represents a nice gain for a perennial league doormat.

Ah, freedom...nice if you're an owner...