House Bill Takes Aim at Tax Break for Sports Owners

New York Times

26-05-2025

Tucked in the domestic policy bill advanced by House Republicans last week is a change to the tax code that could potentially cool the current frenzy among the very wealthy to own professional sports teams.
For decades, owners of teams in the N.F.L., N.B.A. and other major leagues have been able to write off the entire value of their team's 'intangible assets,' which include player contracts, media rights and sponsorships, over 15 years.
Under the House plan, team owners would be able to deduct from their taxes only half the value of those intangible assets over that period.
The tax break, introduced two decades ago, can amount to hundreds of millions of dollars. Intangible assets make up the bulk of a team's worth, and because team values have been steadily rising, the tax breaks have as well. The tax break has turned teams into a kind of tax shelter and has helped fuel the lofty prices that investment firms and billionaires have paid for teams in recent years.
While the provision in the House bill would not affect current owners, only future ones, it threatens to have a chilling effect across sports ownership.
If demand for teams cools, current owners could be hurt because the value of their investments might not grow as quickly. The congressional Joint Committee on Taxation estimates that cutting the write-offs in half would raise $991 million in revenue over 10 years.
Team owners insist the number is far higher, though almost all teams are privately held and do not disclose their financials. Leagues have been doing the math to determine how much the tax bill might hurt them.
The prospect of the tax changes could spur sellers — or buyers — to move more quickly ahead of any changes being formalized, said Mark Weinstein, a partner at the law firm Hogan Lovells.
N.F.L. owners, who met for two days in Eagan, Minn., last week, were briefed on the provision. According to team executives, the owners were encouraged to call senators in their home states to pressure them not to include a similar provision in the Senate version of the policy bill. One team president, who spoke on the condition of anonymity because he feared potential fallout from the president, said that the provision 'felt punitive.' President Trump, he and others said, wants leverage over the owners.
The White House disputed that suggestion. A White House spokesman, Harrison Fields, said the tax measure was about eliminating an advantage for owners at a time when the price of attending sporting events is rising.
'The president is committed to ensuring that sports teams overcharging ticketholders do not receive favorable tax treatment,' Mr. Fields said in a statement. 'His focus is on fairness for fans, not team ownership.'
It's unclear whether the provision was aimed at the N.F.L., which Mr. Trump has sparred with over many years, since it affects all major leagues. That could be by design, Mr. Weinstein said.
'If it was just the N.F.L., then it leads to the conclusion it is punitive, right? If it's all sports leagues, maybe there's some wiggle room,' Mr. Weinstein said. 'It's classic Trump, if you think about it, in that he might intend it to be punitive, but he presents it in a way — maybe it is, maybe it is not.'
In recent years, Mr. Trump has battled over a number of issues with teams and athletes, including the N.B.A. stars LeBron James and Stephen Curry. But his relationship with the N.F.L. dates back to the 1980s when he began showing an interest in buying a team. Unable to land a franchise, he bought the New Jersey Generals of the United States Football League in 1984 and led an effort to sue the N.F.L. for trying to prevent the U.S.F.L., a spring league, from playing in the fall. The U.S.F.L. won, but was awarded three dollars in damages. The league soon folded.
Over the years, Mr. Trump has chided the N.F.L. He played down the severity of concussions and in 2017, he urged owners to fire players who did not stand for the national anthem to protest racial injustice and police brutality.
But Mr. Trump remains friendly with several owners, including Woody Johnson of the Jets and Jerry Jones of the Dallas Cowboys. In March, the Patriots owner Robert Kraft reached out to the president to broker a deal with Paul, Weiss, Rifkind, Wharton & Garrison, a law firm that represents the N.F.L.
This year, the New Orleans Saints owner Gayle Benson invited Mr. Trump to the Super Bowl, and the title-winning Philadelphia Eagles visited the White House. Two weeks ago, Commissioner Roger Goodell and the Washington Commanders owner Josh Harris went to the Oval Office to announce that the N.F.L. draft would take place in Washington in 2027.
Ultimately, Mr. Weinstein said that the allure of teams is so strong that wealthy investors would continue to buy teams, regardless of tax incentives.
'If you're a buyer and you've got that much wealth that you want to join the club, you're going to pay the price,'' he said.