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League considers adjusting ownership rules to account for estate taxes

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Previously, the NFL required (except in Green Bay, where the franchise is publicly held) that at least one person own at least 30 percent of each team.  The league has since softened the rule to permit the 30-percent stake to be held be the same family, with one person owning at least 10 percent of the team.

Daniel Kaplan of SportsBusiness Journal reports that the league is discussing the possibility of reducing the minimum from 30 percent to 25 percent.  Per Kaplan, the issue did not come up for a vote at the league’s meetings last week in New Orleans.

The change would make it easier for families to continue to own a team after the passing of a person who owns a piece of it.  Given that estate taxes must be paid by those inheriting a portion of the team, some families may be required to sell off a slice of the franchise in order to raise the money that the federal government collects for the privilege of dying.  The change, if passed, essentially would allow a family owning 30 percent of a franchise to sell five percent for the purposes of paying the estate tax.

Such a move would provide a one-generation stopgap on the problem, however.  Once a family drops to 25 percent, the estate tax would have to be paid the next time a person owning a piece of the team passes.

Maybe by then the league will drop the amount to 20 percent.

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17 Responses to “League considers adjusting ownership rules to account for estate taxes”
  1. smacklayer says: Mar 29, 2011 2:10 PM

    “Maybe by then the league will drop the amount to 20 percent.”

    Maybe by then this country won’t be run a bunch of socialists and that unfair tax won’t exist anymore.

  2. awdlmd says: Mar 29, 2011 2:21 PM

    Too bad the estate tax isn’t higher. It would clear out some of the incompetent trust fund baby owners. The quality of NFL ownership is going to continue to deteriorate over time. It’s quite a bit easier to inherit a billion dollars than to earn it.

  3. Dean Keaton says: Mar 29, 2011 2:31 PM

    Estate tax is stupid, and it pretty much sucks.

  4. mike83ri says: Mar 29, 2011 2:46 PM

    @smacklayer

    Ya you’re right. It’s Obama’s fault that estate taxes were created in 1916 under Woodrow Wilson.

    While he wasn’t even born yet (outside of the US).

  5. hobartbaker says: Mar 29, 2011 2:48 PM

    Make life a little easier for second degeneration owners. They had to wait hard for their fortunes. Just ask “I’m Art Too!”.

  6. swede700 says: Mar 29, 2011 2:49 PM

    Maybe they should scrap it altogether and just allow public ownership like is done for the Packers. Teams would never threaten to move, and it’d probably be easier to raise capital for new stadiums.

  7. moswesley says: Mar 29, 2011 3:03 PM

    The league shouldn’t do anything. There are plenty of estate planning tricks – ie. paying long term life insurance premiums that cover all estate taxes at death.

    This is another ploy by the owners, who want to profit in the short term from the high value of NFL franchises in an otherwise bear economic climate, without having to shell out any premiums that they should be paying if they truly care about keeping family ownership of a franchise long term.

  8. Slackmo says: Mar 29, 2011 3:11 PM

    They should raise the estate tax. Then the country and these teams won’t be run by a bunch of feudal princes with inheritance trust funds.

  9. tremoluxman says: Mar 29, 2011 3:17 PM

    OMG, those poor owners! They have to pay inheritance/estate tax when one of their family kicks it and they get a slice of the team? That’s so unfair. How come the players don’t contribute anything to help? They’re hogging all the money.

  10. tiredofthestupid says: Mar 29, 2011 4:04 PM

    Most people don’t even realize the intent of the Estate tax was to lessen the effect of a rising oligarchy of the 19th century from creating a level of wealth that could be passed down from generation to generation, thereby creating a de facto royal class that only had to be born to be successful. Which would short circuit the system of merit that the U.S. had tried to foster.

    Most of the people who think taxes are bad has more to do with out and out selfishness and fear their children/offspring won’t have enough brains to tie their own shoes, let alone keep the family wealth. Hence trust funds/managed money and people like Paris Hilton.

    Heck why not do away with taxes for rich people altogether, since they have NO advantages whatsoever in our society. We all know they pay SOOOO much, no wait…they don’t even pay their own fair share:

    Example: 5% population controls 95% of the wealth and income in this country but ONLY pay 70% of the collected taxes. THAT’s fair, right?

    Example: The top 400 families now posses more wealth than the bottom 60% of the population

    Taxes AREN’T bad or good. Only their misuse or use. And an Oligarchy/system of inherited, infinite wealth IS bad. You can rationalize it away with whatever platitudes you want, but it doesn’t change that a class system that rewards someone’s luck at birth is a BAD system.

    You know, like the one we fought against when the country was formed…

  11. watchthisjack says: Mar 29, 2011 5:22 PM

    “Heck why not do away with taxes for rich people altogether, since they have NO advantages whatsoever in our society. We all know they pay SOOOO much, no wait…they don’t even pay their own fair share:

    Example: 5% population controls 95% of the wealth and income in this country but ONLY pay 70% of the collected taxes. THAT’s fair, right?”

    -You are saying that it is unfair that 5% of the population pays “only” 70% of the taxes? Are you serious?

    You can always tell who are the people who earn their way through life from the people who are born expecting something from someone else.

    Why don’t you work really hard and get into that 5% so that you can pay millions of years in taxes to drive on the same roads as everyone else and be told that you are not paying your “fair share.”

  12. jim12385 says: Mar 29, 2011 5:40 PM

    Actually the estate of the decedent pays the estate tax, not those that inherit the estate. Those who inherit the fortune do so tax free, so the way you have it worded is incorrect.

    The estate would sell off a portion of the team, not the heirs.

    And the estate tax really isn’t unfair. Not many outside of the tax and financial planning fields understand it enough to be considered informed on the subject.

  13. tiredofthestupid says: Mar 29, 2011 5:47 PM

    “You can always tell who are the people who earn their way through life from the people who are born expecting something from someone else.

    Why don’t you work really hard and get into that 5% so that you can pay millions of years in taxes to drive on the same roads as everyone else and be told that you are not paying your “fair share.””

    And YOU should try a reading comprehension class…or stop reading through your tea party tinted glasses

    If you make 95% of the income but only PAY 70% of the taxes, you ARE NOT PAYING AN EQUITABLE SHARE.

    It amazes me how some people actually learn to type but cannot understand what it is that they are typing…

    AND as for who I am? A person who PAID every cent for college and never took a dime from my parents (because they didn’t have a dime to spare). I served in the Army and I have never taken a handout, nor am I afraid to work. So you don’t know jack, pal.

  14. lightninglucci says: Mar 29, 2011 6:21 PM

    @tiredofthestupid,

    “Taxes AREN’T bad or good. Only their misuse or use.”

    First part is correct. Second part is correct, but incomplete. Taxes can be COLLECTED unfairly, as well.

    Any tax system based on the premise that all voters but one can vote to take the property from that one is inherently unjust, despite any and all good intentions.

  15. georgiavol91 says: Mar 29, 2011 8:15 PM

    I love it when the wealth envy losers start popping off. They are the 50% of America that pays NO income taxes. So they whine about people who busted their collective butts to be successful. Get a life.

  16. Deb says: Mar 29, 2011 9:26 PM

    @mike83ri …

    Hi! It’s just so rare and wonderful to see signs of intelligent life on PFT Planet :)

    @hobartbaker …

    Art II has been raised to run a football team, and we’ve won two Super Bowls since he . Then you have the guys like Jerry Jones and Dan Snyder. They may not have inherited their teams, but they don’t seem to have inherited a lot of football sense either.

  17. geemoney713 says: Apr 14, 2011 4:17 PM

    @mike83ri

    He didn’t say anything about Obama. Woodrow Wilson was the beginning of the socialist movement in this country. So you’re right in at least that sense.

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