NFL Vote Better Allows Jim Irsay to Keep Colts in Family
According to Daniel Kaplan of Street & Smith’s Sports Business Journal, the NFL voted last week at the Spring League Meetings in San Francisco, California, to allow trust ownership of teams, which should help NFL owners with designated family heirs like the Indianapolis Colts very own Jim Irsay to better transfer ownership:
"“With escalating franchise values making it harder for owners to pass on control to sons and daughters because of mountainous estate tax hits, the league took a step it long spurned, allowing irrevocable family trusts to own control stakes in teams,” writes Kaplan. “Under tax law, trusts can shield the heirs of the wealthy from a sizable portion of inheritance taxes that otherwise would be due.”“The move carries great benefits for team owners and their families because these types of trusts significantly reduce, and can eliminate, estate and gift taxes when assets are passed between generations,” adds Kaplan. “Thirty-one of the 32 teams voted to approve the Irrevocable Family Trust proposal, with the Tennessee Titans abstaining, a source said.”"
Additionally, in a separate but also beneficial move for owners with family heirs like Irsay, the league lowered its required owner’s control from 10% to 5% for individual owners. However, the owner’s family is still required to maintain 30% control of equity at all times, while his or her individual ownership percentage stake can be lowered to as little as 5% now:
"“The league also is lowering the percent stake necessary to control a team, said Art Rooney II, the Pittsburgh Steelers owner,” writes Kaplan. “When an owner initially buys a team, he or she must control at least 30 percent of the equity. Previously, after a decade, that figure could drop to 10 percent if the family continued to control 30 percent.”“Now that control figure is 5 percent, though the family still must own 30 percent, Rooney said,” adds Kaplan. “The percent stake drop is not directly tied to the trust move. Either change, whether together or separately, should greatly aid teams getting passed between generations.”"
Jan 4, 2015; Indianapolis, IN, USA; Indianapolis Colts owner Jim Irsay attends the 2014 AFC Wild Card playoff football game against the Cincinnati Bengals at Lucas Oil Stadium. Mandatory Credit: Kirby Lee-USA TODAY Sports
For an NFL owner like the Colts 55-year old Jim Irsay, it better allows him to keep the Colts in his family and eventually transfer ownership rights to his heirs and direct descendants.
Irsay and the Colts organization have already made long-term plans to eventually shift full ownership to his heirs, daughters Carlie Irsay-Gordon, Casey Foyt, and Kalen Irsay, all of whom are currently listed as Vice Chair/Owners via the Colts official staff page and have taken on greater organizational responsibilities in recent years.
Taken together, it’s a positive breakthrough for the Irsay’s wish to keep the Colts a “family business”, and last week’s vote will definitely help further their cause going forward into the future:
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