NFL Owners Face Potential Financial Hit from New Domestic Spending Bill Tax Changes

In a significant move impacting the world of professional sports, a new domestic spending bill, recently passed by the U.S. House of Representatives, includes a provision that may have NFL team owners concerned. The bill proposes to limit the write-off of intangible assets, such as player contracts, media rights, and sponsorships, which currently allows owners to deduct the entire value of these assets over a 15-year period.

Under the new legislation, owners would only be able to write off half of the value of these intangible assets. This change is expected to have major financial implications for NFL owners, as intangible assets represent a substantial portion of a team’s overall value. With professional sports franchise values rising rapidly, the potential loss of this tax break could amount to hundreds of millions of dollars in taxes that owners can currently avoid.

The Congressional Joint Committee on Taxation estimates that this adjustment could raise around $991 million over the next decade. However, many owners believe the actual figure will be significantly higher. This change is not retroactive, meaning it will only affect future owners of NFL teams. The implication is clear: it could potentially lower the value of ownership stakes in the future, as buyers may be less inclined to pay top dollar without the current tax advantages.

During the NFL’s quarterly meetings last week, owners were reportedly encouraged to reach out to senators to lobby against this bill. Some view the decision as a direct hit, suggesting that it feels punitive, and they believe it reflects a broader attempt by the government to exert pressure on NFL ownerships.

In response, a spokesperson from the White House reaffirmed the administration’s stance, emphasizing that the changes aim to create fairness for fans and ensure that sports teams do not benefit from favorable tax treatments while overcharging ticket holders.

The outcome of this legislation could have lasting effects, shaping the future landscape of ownership within the NFL and potentially changing how teams are valued in an increasingly competitive market.