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Tax Revisions Of 2004 And Pro Sports Team Ownership

Author

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  • N. EDWARD COULSON
  • RODNEY FORT

Abstract

Tax law revisions of 2004 altered the “roster depreciation allowance” enjoyed by pro sports team owners. Supporters claimed this would practically eliminate costly legal oversight by the IRS and, ultimately, increase owner tax bills. Government officials and leagues remained silent on team value impacts but outside analysts argued they would rise by 5%. We model this policy change and investigate it empirically. Supporters in Congress were absolutely correct that owner tax payments should increase but outside analysts underestimated team value increases by half. No wonder Major League Baseball and the National Football League favored the revision. (JEL D21, G38, H25, L83)

Suggested Citation

  • N. Edward Coulson & Rodney Fort, 2010. "Tax Revisions Of 2004 And Pro Sports Team Ownership," Contemporary Economic Policy, Western Economic Association International, vol. 28(4), pages 464-473, October.
    • Handle: RePEc:bla:coecpo:v:28:y:2010:i:4:p:464-473
    DOI: 10.1111/j.1465-7287.2009.00192.x
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    Cited by:

    1. Brad R. Humphreys & Li Zhou, 2014. "Loss Aversion, Team Relocations, and Major League Expansion," Working Papers 14-17, Department of Economics, West Virginia University.
    2. Cristian F. Sepulveda, 2022. "Cost-benefit Analysis of an 'Average' Professional Sports Team or Stadium in the United States," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper2210, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Philip L. Hersch & Jodi E. Pelkowski, 2019. "The Consequences (and Nonconsequences) of Ownership Change: The Case of Major League Baseball," Journal of Sports Economics, , vol. 20(1), pages 72-90, January.
    4. Humphreys, Brad R. & Zhou, Li, 2015. "Reference-dependent preferences, team relocations, and major league expansion," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 10-25.

    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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