Buyers of Seahawks made billions of dollars in Bay Area tech

Herrick Partner and Chair of the Tax Department, Louis Tuchman, was quoted in The Seattle Times in an article discussing the sale of the Seattle Seahawks and the potential tax considerations for the team's ultimate purchaser. 

The article focuses on a group reportedly led by the Khosla family and how the prospective transaction might "fit into the finances of the Kholsa family, which has a reported net worth of $14 billion." 

The article discusses that one attraction to this type of purchase is sports' "emerging value in an entertainment world increasingly dominated by AI content." Another selling point is the federal tax provisions that let purchasers of a company's assets deduct part of the cost from income taxes over 15 years. 

Louis noted that "so-called cost-recovery deductions aren’t unique to sports teams, but apply to many transactions where actual assets are being purchased."

While Louis stated that he does not know the details of the purchase or how much the team generates, "[b]ut as a rough estimate, he said the deduction might allow the Khosla group to deduct a little under 6% of the purchase price each year for 15 years." 

“This is a major purchase…I don’t care how wealthy you are.,” Tuchman said. “It’s fair for someone who’s making an investment of this sort to say, ‘Okay, how am I recovering my investment?’”

Read the full article in The Seattle Times here. Access may require a subscription.