Proposed California billionaire tax could affect owners of major sports franchises
A ballot measure that would levy a one-time 5% tax on billionaire assets may apply to several California sports team owners, prompting debate over its impact on ticket prices and the state’s economy.
A California ballot initiative, Proposition 40, would impose a one-time 5% levy on the assets of billionaires to fund health-care programs after federal cuts. The measure could affect owners of high-profile sports teams, depending on whether they are deemed California residents for tax purposes.
Potentially liable owners include Los Angeles Chargers majority owner Dean Spanos, Warriors partners Joe Lacob and Peter Guber, San Diego Padres investors José E. Feliciano and Kwanza Jones, San Jose Sharks co-owner Hasso Plattner, and Anaheim Ducks owner Henry Samueli. By contrast, owners who appear to reside outside the state—such as San Francisco 49ers co-owners Denise DeBartolo York and John York, Los Angeles Clippers owner Steve Ballmer, and San Francisco Giants owner Charles Johnson—may be exempt.
The tax’s application to team ownership stakes remains uncertain, and officials for several franchises declined comment. A spokesperson for former Lakers owner Mark Walter said he has no plans to sell the team, while a spokesperson for prospective buyer Bob Iger declined to comment.
"It creates an uneven playing field. Out-of-state owners get an advantage over in-state residents," said sports agent Leigh Steinberg, warning that the levy could be passed on to fans.
"Ticket prices are high enough anyway, and somewhat prohibitive to a working person or young person attending a game live. The last thing in the world positive for the growth of sports is passing on that surcharge," Steinberg added.
"The billionaire wealth tax would address the health-care crisis caused by the Trump administration slashing Medicaid and other health-care funding. Passing the billionaire wealth tax would be expected to reduce health-care costs and thereby keep the prices of hot dogs and other consumer goods lower," said tax professor David Gamage, noting that consumers would be more harmed by federal health-care cuts than by modest ticket-price increases.
"This will also drive up the cost of operating a sports team in California, increasing the price of tickets, concessions and merchandise," said Rob Lapsley, president of the California Business Roundtable.
"It’s really, really expensive to bring a family to watch a professional game, whatever that game may be. All those costs will go up, and for sure, it’ll be passed down to the cost of the ticket," said Los Angeles Times owner Dr. Patrick Soon-Shiong.
Opponents argue that the tax could hurt the state’s sports-related economy, while supporters contend that billionaire owners have benefited from recent federal tax cuts and should contribute to health-care funding. A University of California, Berkeley poll shows the electorate split, with roughly half opposing the measure. Campaign financing records indicate more than $404 million has been spent on both sides, with opponents raising the bulk of the funds.