Soaring sports team values pressure owners on taxes, succession

Sports team owners benefiting from soaring team values are also facing new pressure from two of the oldest certainties in American wealth: death and taxes.

With the average age of team owners rising, and team values skyrocketing into the billions, owners and leagues are increasingly focused on how to ensure smooth ownership transitions to the next generation of buyers. While today’s owners have highly sophisticated tax and succession plans, even the best plans can blow up over family disputes or unexpected tax changes.

“The people who bought sports teams a long time ago have now found that a large portion, if not a vast majority, of their long-term estate is now the value of the team,” said Stephen Amdur, co-leader of mergers and acquisitions and private equity practices at Pillsbury Winthrop Shaw Pittman, who advises many billionaire team owners. “They’re thinking a lot about who is going to hold it for the next generation and what they’re going to do with it.”

Succession and taxes have become especially important in the National Football League, where the average age of team owners is now over 72 and team values are all surging. CNBC’s Official 2024 NFL Team Valuations list, ranking all 32 professional franchises, will be released Thursday.

NFL owners face one of two painful choices: They can sell the team while they’re alive, which can create massive capital gains tax bills, or they can pass the team to their families, which can trigger estate taxes or prolonged family battles for control.

Former Denver Broncos owner Pat Bowlen created a detailed succession and tax plan for the team a decade before his death in 2019. Yet a bitter dispute among family members, both before and after he died, led the team to be sold in 2022 to Walmart heir Rob Walton for $4.65 billion.

Tennessee Titans founder Bud Adams, who died in October 2013, had divided ownership of the team among three branches of his family, which he thought would keep the peace. Instead, the split created a highly public battle over control, leading to an eventual deal within the family. Amy Adams Strunk, Bud’s daughter, is now controlling owner of the team.

Longtime New Orleans Saints owner Tom Benson touched off years of litigation when he removed his daughter and two grandchildren from his estate and passed ownership of the NFL team and the National Basketball Association’s New Orleans Pelicans to his wife Gayle when he died in 2018. She still maintains control of the Saints.