Spanos family won’t need to sell due to estate taxes

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When the patriarch of a family that owns an NFL franchise passes, one of the most important questions becomes whether the transfer of his ownership interest to other family members will trigger the kind of estate-tax obligation that will make it impossible for the family to pay the taxes without selling all or part of the team. For the Chargers, the passing of Alex Spanos will not force the family to sell.

Per a source with knowledge of the situation, Alex Spanos commenced the process of planning for the transfer of the team in 1998. The goal was to ensure that the Spanos family would be able to continue to own and operate the franchise for as long as they choose to do so.

And they choose to do so; according to the source, the family will not be selling any of the team, and no plans exist to sell any of the team in the future.

The process began with the transfer of 60 percent of the team to his four children, 20 years ago. In 2006, Dean Spanos (pictured) became the controlling owner, something the league requires for franchise voting purposes. Regardless of how the percentages are divided among family members, one person must possess the title of controlling owner.

Thus, Dean Spanos will continue to serve as the controlling owner. Dean Spanos and his three siblings (Michael, Dea, and Lexi) will continue to own 60 percent of the team.

Alex Spanos and his late wife, Faye, retained 36 percent of the team. Plans were put in place as of 1998 to handle the transfer of that interest and the payment of the estate taxes. Per the source, the 36 percent will remain in the Spanos family.

The remaining four percent of the team continues to be owned by persons who trace back to the days when Gene Klein owned the team.

Thus, 96 percent of the asset was in the Spanos family, and 96 percent of the asset will stay in the Spanos family, with the estate taxes not an issue.

54 responses to “Spanos family won’t need to sell due to estate taxes

  1. Yeah not sure I understand all the legalese, nor do I want to. However 47% of the country votes to protect this at their own expense, even though only 1% need to care. And we complain about kneeling.

  2. That reminds me to contact an estate attorney to protect what little I have as I get older every day. Common sense for everyone.

  3. TruFBFan says:
    October 9, 2018 at 4:08 pm
    Yeah not sure I understand all the legalese, nor do I want to. However 47% of the country votes to protect this at their own expense, even though only 1% need to care. And we complain about kneeling.

    _____________

    Childish take. The Spanos family would of been doing just fine, regardless of what the government took in an estate tax. The family making 75k a year and paying off a mortgage, isn’t going to be able to eat that tax as easily

    No rich people lose their homes because of the estate tax. Happens often “normal” people

  4. sumkat says:
    October 9, 2018 at 4:23 pm
    Childish take. The Spanos family would of been doing just fine, regardless of what the government took in an estate tax. The family making 75k a year and paying off a mortgage, isn’t going to be able to eat that tax as easily

    No rich people lose their homes because of the estate tax. Happens often “normal” people
    _____________

    The estate tax doesn’t apply until your net worth is more than $5 million. It never affects people at the wealth level you described. Educate yourself.

  5. The estate tax doesn’t kick in in 2018 until 11.5 million of estate value. No one making 75,000 is affected. I know Democrats are upset they don’t get all that money. The dead already vote Democrat, leave some for the family.

  6. No so 8 yrs ago. They had liquidity complications in 2010 and now face estate taxes plus the $650M LA relocation fee.

  7. We were all praying these idiots were going to have to sell the team.

    Im a Phil fan for a few more years but I am looking to transition to the Rams or Browns in the future. The Rams are exciting and they will ensure the Spanos team is the lowest value team in the NFL for the foreseeable future. And as for the Browns if I didn’t love a poor performing team I wouldn’t have been a bolts fan for 25 years and counting.

  8. Too bad for Chargers fans. The Spanos family are incompetent owners. A good owner would’ve stayed in San Diego and invested in the stadium. Stadiums aren’t exclusively for football and can be used/rented out for many reasons to make money year round. The cheap skate Spanos family ditched the fans, and moved to a city that didn’t want them. Now the Chargers are an embarrassment that have trouble filling a small soccer stadium.

  9. What other nonsense! Rich people do not pay estate taxes. That’s nonsense thing that the Trump administration shops in peoples faces all the time.

    By the way, rich people pay no taxes You pay the taxes you Bear the brunt of these kind of ownership decisions. You let rich guys subsidize their stadiums on the back of your property taxes.

    All of you suckers who thought that Trump was going to save you ha ha Ha.

  10. The only tragedy here is that they’re keeping the team.

    Would have made for a phenomenal story if they sold it and whoever bought it, brought it back to San Diego where it belongs. One thing for certain, Los Angeles doesn’t want ’em.

  11. I wish the late great Joe Robbie would have planned his estate like the Spano’s family instead of the family getting caught in an IRS estate tax fire sale and selling our team to some of the worst owners in south Florida pro sports history.
    I miss Joe Robbie!

  12. If anyone in this comment section has a relative with a sizable estate that passes away they will realize how unfair estate taxes are.

    You earned the money and it’s already been taxed once. There is no reason to pay taxes twice on your money.

  13. sumkat says:
    October 9, 2018 at 4:23 pm
    TruFBFan says:
    October 9, 2018 at 4:08 pm
    Yeah not sure I understand all the legalese, nor do I want to. However 47% of the country votes to protect this at their own expense, even though only 1% need to care. And we complain about kneeling.

    _____________

    Childish take. The Spanos family would of been doing just fine, regardless of what the government took in an estate tax. The family making 75k a year and paying off a mortgage, isn’t going to be able to eat that tax as easily

    No rich people lose their homes because of the estate tax. Happens often “normal” people

    ____________________

    um… what? not sure what you are qualifying as “normal” people, but the Federal Estate Tax is currently north of $5.5 million. So unless your adjust gross estate is above, youre not impacted by the Federal Estate Tax (some states have a progressive estate tax, like my lovely state, NY). Not sure what reality you live in, but very few “normal” people I know, making $75K a year have a net worth above the estate tax, which is adjusted upwards every year, under current tax law. The Estate tax effects upper-middle class to wealthy who have failed to plan. Look at what it did to Elvis Pressley estate, Rockerfellers, and some other famous people. It was a good try and fail with the hyperbole though.

  14. The stink’n think’n of the fare weather fans of San Diego is the reason why the Chargers left. I feel bad for the die hard Bolt fans.

  15. The vast majority of taxes paid in this country are paid by the top 20%, aka the evil rich. Nearly half the country pays no taxes, and the bottom quintile actually makes money as “credits.” We already have one of most progressive tax systems on earth, and the only people who complain about it constantly are the free riding progressives.

  16. “The vast majority of taxes paid in this country are paid by the top 20%, aka the evil rich”.

    Actually it is the top 10%, but regardless, your point is irrelevant. You’re referencing income taxes, while the discussion is about estate taxes. Two completely different subjects, with two completely different sets of rules.

  17. Anyone who thinks that a family making $75,000 A year will have to pay federal estate tax is too uniformed to be allowed to vote. A simple Google search would inform you that an exemption exists for the first $5+ million of estate value. At least try to educate yourself.

  18. Estate taxes are as BS as the roughly 50% tax on lottery winnings. They take half your money and don’t even credit you for the dollar that you paid for the ticket.

  19. Oh the poor poor government will go broke without more tax seizures from the people.
    Cry me a river, the economy is best when people can keep what they earn, not when the government interferes and steals money to spend on vote-buying schemes and “global warming”.

  20. J K says:
    October 9, 2018 at 4:28 pm
    100% of Chargers fans are disappointed by this news.

    YEA all 17 of them!

  21. I would love to know the investors that have 4% of the team, how much that’s worth in today’s dollars vs their initial investment some 35 years ago?…..say a 4 to 5 million outlay in 1980, worth about 45 to 50 million fashion value today?…..not bad at all.

  22. A few points…

    – The Federal Estate Tax exemption is now $11.2 Million per spouse or $22.4 Million for a married couple. Nothing under those amounts are taxed.

    – 2017 was an all time high for claims related to hurricanes, etc and 2018 is on line to crush it. Scientists (those who spend time studying it instead of listening to oil companies) overwhelmingly agree it’s due to global warming.

    – Because of the step up in basis which allows those inheriting an asset to pay no capital gains tax, estate taxes are not double taxation despite claims to the contrary.

    – Defense, Social Security, Medicare and Medicaid and interest on the debt take up almost 75% of the budget. You could cut 100% of ALL ELSE (education, roads and highways, veterans, housing, science, NASA, etc) and we’d still have a deficit. It’s not due to waste.

  23. cardinealsfan20 says:

    October 9, 2018 at 8:48 pm

    Anyone who thinks that a family making $75,000 A year will have to pay federal estate tax is too uniformed to be allowed to vote. A simple Google search would inform you that an exemption exists for the first $5+ million of estate value. At least try to educate yourself.

    Yes, you should try Google. The estate tax exemption in 2018 is $11,180,000 per person. A couple can transfer $22,360,000 tax free. But it is true, nobody making $75,000 per year has that large of an estate.

  24. Peter Holmes says:
    October 9, 2018 at 5:50 pm
    pantherpro says:
    October 9, 2018 at 5:43 pm

    I don’t pay raxes

    Your friend Donald T

    ———–

    And that makes me smart

    37 54 Rate This
    ——————————————
    Finding clever loopholes is smart. Tax fraud and evasion to the tune of 200 million makes you one of the dumbest criminals in history.

  25. Childish take. The Spanos family would of been doing just fine, regardless of what the government took in an estate tax. The family making 75k a year and paying off a mortgage, isn’t going to be able to eat that tax as easily

    No rich people lose their homes because of the estate tax. Happens often “normal” people

    ___________________________________________________________

    Dude, the US estate tax doesnt kick in until you hit the multi-million dollar threshold. The only non rich people who could EVER be hit by this are owners of large farms, and thats only due to the sheer acreage of land. The basic rule of thumb is, if you dont currently refer to your house as an estate, theres a 99% chance the estate tax doesnt apply to your family. I honestly dont get what some people dont understand about this.

  26. Estate taxes are a fun paradox. The tax only hits people trying to pass down well in excess of 5 million dollars. So the only people hit by the estate tax are millionaires and the largest farms due to their sheer acreage. And yet people keep thinking it applies to everyone.

    The only people who pay the estate tax and complain about the estate tax are the people who can easily afford it.

  27. Such a rip off tax. The government taxes everything you purchase and your income. I don’t care how rich they are, taxing the death in a family is just wrong.

  28. I’m pretty sure that Spanos can’t sell the team for 5 years after moving the team anyway, so he would have had to seek a special exemption if he did have to pay the estate tax and couldn’t afford to do so without selling.

  29. cpapfs says:

    “Yes, you should try Google. The estate tax exemption in 2018 is $11,180,000 person. A couple can transfer $22,360,000 tax free”.

    Thank goodness you are not my CPA The 2018 estate tax exemption is 5.6 million per individual. A married couple (not just any couple as you stated) may be able to shield up 11.2 million, assuming that the transfer from the decedent to the surviving spouse is correctly structured.

    Hope your professional liability insurance is up to date.

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