My friend from the party texted me two days after my article on Ohtani went up. He read the whole thing, and he had one more question. If the player saves money by getting paid later, he asked, what does the team get out of it?
Fair question. I answered half of it in my first article, the half about Section 409A and why Ohtani agreed to take $2 million a year instead of $70 million. That was the player’s side of the ledger. Today I want to walk through the owner’s side, and I promise it is even more interesting than the deferral trick.
Because while Ohtani was busy pushing income into the future, the same week brought news that Mark Walter, who owns the Los Angeles Dodgers, agreed to sell his stake in the Los Angeles Lakers for $12.5 billion. That sale, and a string of others happening across pro sports right now, points to a tax strategy that has almost nothing to do with residency and everything to do with a deduction most business owners have never heard of.
Buying a Team Is Basically Buying a Tax Shelter
Here is a fact that surprises almost everyone I explain it to. When someone buys a professional sports franchise, the tax code lets them write off nearly the entire purchase price against their income. Not the stadium. Not the equipment. The players, the media contracts, the brand itself.
This works through a rule called amortization, which is the intangible asset version of depreciation. Under current law, a buyer can deduct 100% of a franchise’s intangible value over 15 years. Congress expanded this rule in 2004, and it applies to nearly every dollar of what a team is actually worth, since most of a franchise’s value sits in things you cannot touch.
I want you to sit with that for a second, because it explains a lot. A team can be wildly profitable in the real world and still show a tax loss on paper, purely because of this deduction. That is not an accident. It is baked directly into how Section 197 of the tax code treats these purchases.
A Real Example Makes This Click
Numbers help here more than theory does. When Steve Ballmer bought the Los Angeles Clippers, reporting based on his leaked tax returns showed he used losses tied to the team to shelter roughly $140 million of income over a five year stretch. The team was not actually losing money. The deduction simply outran the profit on paper.
Scale that logic up to this year’s headlines. The Seattle Seahawks sold for a record $9.6 billion. The Atlanta Falcons recently agreed to sell a minority stake at a $10.6 billion valuation. Every one of those buyers now has access to the same 15 year amortization window Ballmer used, applied to a purchase price with far more zeros attached.
This is the piece nobody mentioned at that party. Owning a sports team is not just about box seats and bragging rights. It is one of the most tax efficient ways to hold an appreciating asset that I have seen in any industry, sports or otherwise.
Congress Almost Took This Away, and Owners Fought Back
Here is where the story gets political, and I think business owners should pay attention regardless of which side of the aisle they sit on. In 2025, the House version of what became the One Big Beautiful Bill Act included a provision cutting this deduction in half for any team purchased after the bill took effect.
Team owners did not sit quietly. Reporting named several owners who lobbied senators directly to strip the provision out, including some with deep ties to lawmakers on both sides. By the time the bill reached the Senate, the sports team amortization cut had been removed entirely.
The final law, signed in July 2025, left the existing 100% deduction fully intact. Current 2026 team purchases, including this year’s Seahawks and Falcons deals, still qualify for the full benefit. I find this fascinating not because of who won or lost, but because it shows how seriously sophisticated owners treat their tax position. They do not just plan around the tax code. Sometimes they help write it.
Why This Should Matter to You, Not Just Billionaires
I can already hear the objection. None of my clients are buying an NFL franchise, so why does this matter to a business owner reading a tax article on a Wednesday? Because the underlying rule applies far beyond sports.
Section 197 amortization covers goodwill and other intangible assets in any business acquisition, not just professional teams. If you buy a competitor, acquire a book of clients, or purchase a company with an established customer list, you can likely amortize a meaningful chunk of that intangible value over 15 years too. I have structured deals for clients around exactly this rule, and it consistently gets overlooked in smaller transactions where people assume these breaks only exist for billionaires.
I wrote previously about why the tax code has always favored asset owners, using landlords as the example instead of team owners. The logic here rhymes with that piece almost exactly. Whether you are buying real estate, a business, or apparently an NFL team, the code rewards the person who owns the appreciating asset far more than the person who simply earns a paycheck from it.
The Lakers Sale Adds One More Wrinkle
Mark Walter’s Lakers sale deserves its own mention, because it highlights a second tax concept worth understanding. He bought control of the Lakers in October of last year and agreed to sell less than a year later at a massive premium.
Here is the detail that matters for anyone thinking about timing a sale of their own business or investment. Assets held for one year or less get taxed as short term capital gains, which means ordinary income rates up to 37% in 2026. Hold that same asset past the one year mark, and the top federal rate drops to 20%, plus a 3.8% net investment income tax for high earners.
That gap is enormous on a deal of this size. I do not know the exact structure of Walter’s sale or what offsetting factors might apply, but the math is a useful reminder for any business owner sitting on an asset near its one year anniversary. A few extra weeks of patience can be the difference between two very different tax brackets.
Two Halves of the Same Playbook
Step back and look at both articles together, because that is really the point I wanted to make from the start. Ohtani defers income to control which state taxes it, and when. Team owners amortize a purchase price to shrink taxable income for fifteen straight years. Different mechanisms, same underlying instinct.
Both strategies come down to controlling timing rather than controlling the total dollar amount. That is the single idea I want every business owner reading this to walk away with. You often cannot control how much money you make in a given year. You frequently can control when that income shows up on a tax return, and where you are standing when it does.
My friend at the party got his answer, even if it took two articles and a couple of weekends of research to get there. Sometimes the best stories start with a question you did not expect to hear over party music, and end up explaining exactly how the wealthiest people in the country actually build and protect their wealth.
Welcome to the New Age of Accounting. Let’s begin.
P.S. If you found this article helpful, you’ll love my new book S-Corp Mastery: How Smart Business Owners Maximize Tax Savings & Build a Lasting Legacy. It’s now live and available in a sleek, easy-to-read PDF version. Grab your copy here
Chris is the Managing Partner at Weston Tax Associates, a best-selling author, and a renowned tax strategist. With over 20 years of expertise in tax and corporate finance, he simplifies complex tax concepts into actionable strategies that drive business growth. Originally from Sweden, he now lives in Florida with his wife and two sons.
