Buy a Sports Team, Get a Tax Break


Since the passage of the American Jobs Creation Act of 2004, buyers of sports teams have been able to write off a big chunk (sometimes almost all) of the purchase price against the team's taxable income over 15 years. And because sports franchises these days are usually structured as limited liability companies or other pass-through entities whose earnings or losses flow through to owners' personal tax returns, this tax deduction can also be used to offset income from other sources. 

This benefit is available to buyers of all kinds of businesses, but the remarkably high purchase prices of sports teams relative to the income they generate make it especially valuable to their owners. Sport Management professor Rod Fort weighs in.