'It's an elite club': Donald Trump wants to end 'all special tax breaks' for ultra-rich sports team owners — here's why it may not have the impact you'd expect

Owning a sports team has long been a hallmark of the ultra-wealthy. Forty-two of the world’s 500 richest people own U.S. sports teams, according to Bloomberg, and all but two of them are American. Those owners are worth a combined $869 billion.

Beyond the prestige, ownership of a sports team comes with massive financial benefits. It’s unclear exactly which tax breaks Trump is focused on eliminating, or if lawmakers will ultimately go along with his proposals. Some experts, however, believe that any changes may only have a limited impact.

Perks of team ownership

One of the biggest tax advantages of buying a sports team is the ability to write off at least part of the purchase price — which can be billions of dollars — against taxable income over 15 years.

This is similar to other businesses. For example, buyers of factory equipment can deduct their purchase costs over time. The big difference with sports teams, however, is owners can write off intangible assets, such as TV deals and player contracts, that are unlikely to go down in value in the future.

It can be argued that amortization potential is baked into the purchase price of sports franchises. If owners were suddenly unable to write off these intangible assets, it could affect team valuations.

“The effect of this, if it does happen, could be pretty devastating to the value of sports teams,” CNBC’s senior sports reporter Mike Ozanian said on a Feb. 7 broadcast.

What about tax revenue?

It’s hard to imagine billionaire owners losing too much sleep over a tax bill.

“You don’t buy a sports team and hope to become wealthy; you’re a wealthy person and you buy a sports team,” Eric Nemeth, a tax partner at Varnum law firm, told Bloomberg. “It’s an elite club.”