New York (Aug. 3, 2004) — A minor portion of the current export-tax legislation measure that is currently before lawmakers, may, in effect, enhance the value of the nation’s sports franchises.
According to The New York Times, the proposal would allow the owners to write off the full value of their franchises over a 15-year period. Currently, the existing guidelines limit teams to writing off only the value of player contracts over three to five years. Additionally, large items subject to the new ruling include write-off periods for lucrative television and radio contracts.
Experts in the areas of sports banking and tax policy opined that the change could add 5 percent to sports franchise values, or roughly an additional $2 billion. In 2002, the value of the nation’s professional sports franchises was an aggregate $41 billion according to Forbes magazine.
The benefit to the sports world was part of a 960-page bill introduced originally to settle a trade dispute with the European Union. But that legislation has come under criticism because it has tacked on numerous special interest “add-ons.”
The bill, which has been approved by both houses, is expected to go before a conference committee to resolve the differences. A final version is expected to be put before both houses in September.
— WebCPA staff
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