Billionaire Sports Team Owners’ Fortunes Soared While They Enjoyed Tax Breaks

For a select cohort of billionaires, there is no clearer sign of success than owning a professional sports team. It signifies not only that you’ve built (or inherited) a billion-dollar business but that you’ve got enough excess cash to commit hundreds of millions of dollars—or in some cases billions of dollars—to buy a rare American asset. 

Altogether, there are 150 pro sports teams among the National Football League, Major League Baseball, the National Basketball Association, the National Hockey League and Major League Soccer. Forbes found more than 40 billionaires who own controlling stakes in these teams—stakes that for many of these owners have proved to be incredible investments.

Some of the wealthiest team owners in professional sports have managed to use the U.S. tax code to their advantage, reducing their tax burden to rates sometimes lower than those paid by the players or even stadium workers, according to a report by ProPublica that cites confidential Internal Revenue Service data.

Several team owners deducted nearly the entire purchase price of their teams from taxes on their future earnings, ProPublica found—a hefty sum, with NFL teams valued at more than $2 billion while NBA teams go for at least $1 billion. Others used their teams’ reported losses as write-offs to pay less in taxes on their other earnings. In the meantime, these billionaires’ fortunes, as well as their teams’ values, have climbed significantly.

Among those mentioned in ProPublica’s report are Steve Ballmer, owner of the NBA’s Los Angeles Clippers; David Tepper, owner of the NFL’s Carolina Panthers; Dan Gilbert, owner of the NBA’s Cleveland Cavaliers; and Shahid Khan, owner of the NFL’s Jacksonville Jaguars. In the years since these teams were purchased by their current owners, their values have grown by an average of $155 million—each year. Here’s how much richer these billionaires have become since acquiring their teams. (Billionaire net worths are as of July 12, 2021.) 

Steve Ballmer

• Net worth: $81.6 billion 
• Team: LA Clippers (NBA), worth $2.75 billion (2021)
• Rise in team value since purchase (2014): $750 million
• Rise in personal net worth since purchase (2014): $59.1 billion
• Team championships: 0
• Team winning percentage since purchase: 62.2%

The Los Angeles Clippers have more than doubled in value since Ballmer purchased the basketball team in 2014 for what was then a record-shattering $2 billion—despite not having won a single championship in the team’s history. Ballmer’s fortune has multiplied since his big purchase, which he made the same year he stepped down from his post as Microsoft’s CEO. He has also ramped up his philanthropic efforts since then, putting over $2 billion in a donor-advised fund aimed at lifting Americans out of poverty. According to ProPublica’s report, Ballmer paid $78 million in taxes last year, giving him a 12% federal income tax rate.

David Tepper

• Net worth: $14.5 billion
• Team: Carolina Panthers (NFL), worth $2.55 billion (2020)
• Rise in team value since purchase (2018): $250 million
• Rise in personal net worth since purchase (2018): $2.9 billion
• Team championships: 0
• Team winning percentage since purchase: 35.5%

The founder of Appaloosa Management, Tepper is arguably the greatest hedge fund manager of his time. At its peak, Appaloosa managed $20 billion in assets; it currently manages nearly $13 billion. Tepper purchased the Panthers three years ago for $2.3 billion; ProPublica estimates that he’s been able to deduct $140 million a year for tax reduction purposes.

Dan Gilbert

• Net worth: $38.5 billion 
• Team: Cleveland Cavaliers (NBA), worth $1.56 billion (2021)
• Rise in team value since purchase (2005): $1.2 billion
• Rise in personal net worth since purchase (2005): $37.6 billion
• Team championships: 1
• Team winning percentage since purchase: 49.8%

At age 22, Gilbert founded what would later become Quicken Loans, the largest mortgage lender in the U.S. He has accumulated most of his wealth since purchasing the Cavaliers in 2005. The team, which he paid $375 million for in 2005 and which won its first-ever NBA championship in 2016, has jumped in value by over 300% during his ownership. According to ProPublica, Gilbert has lowered his taxable income by a total of around $443 million from 2005 to 2018 through amortization expenses and the team’s financial losses.

Shahid Khan

• Net worth: $8 billion
• Team: Jacksonville Jaguars (NFL), worth $2.45 billion (2020)
• Rise in team value since purchase (2012): $1.68 billion
• Rise in personal net worth since purchase (2012): $5.5 billion
• Team championships: 0
• Team winning percentage since purchase: 27.1%

Khan owns auto parts supplier Flex-N-Gate, with 69 plants worldwide and over 26,000 employees. In 2019, he launched WWE competitor All Elite Wrestling with his son. Khan has amassed the majority of his wealth in the years since he purchased the Jaguars in 2011 for $770 million, a team that has won less than a third of its regular-season games since the acquisition. Khan has used at least $79 million in losses by the NFL team to lighten his tax burden, according to ProPublica.