Jeanie Buss spotted wearing ugly hat

Re: Jeanie Buss spotted wearing ugly hat

Postby Rooscooter on Wed Mar 19, 2014 4:54 pm

^^^vash.... You do realize that is "paper wealth" based on projections right?

Also every one of those millions over 6 is only 500k after the death taxes. The other appreciation is taxed on liquidation..... Death taxes are due in a month.

Liquid cash to pay that will be massive..... Loans will be taken out is my guess and be re-payed over a decade or more by the kids.
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Re: Jeanie Buss spotted wearing ugly hat

Postby Vasashi17 on Wed Mar 19, 2014 5:06 pm

Roos, but you can't ignore that the Lakers are most profitable when bringing in namers.

It explains the premature Kobe extension....it explains why they wanted CP3, then Nash and Dwight while retaining Pau, right before the channel became available (recall the "Demand your Lakers" campaign in TWC inaugural season?)

First of all, with the Lakers clearing cap this summer, they're going to be essentially low tax payers from here on out, unless they use their own free agents to balloon over the tax apron. Signing other teams' free agents is obviously going to be our primary means of attack moving forward. So I'm sorry, but I don't see the Stephenson and Monroe route....I'm thinking LA wants those names. If Melo and Bron are off this summer, then they're looking at 2015, then 2016 and so on just to bring marquee names in.

They are more profitable the longer that cable deal sticks around. I'm not sure if TWC has an out in that contract, but in order for LA to make sure that contract remains intact, they'll do whatever it takes to increase the ratings...and seeing how they dealt with Kobe earlier this season, I'm sure that's the route they will pursue.

If that means a 30-40M tax hit...so be it. They know that is worth the trade off when those Neilsen ratings come in.

As for the estate tax:

Buss was never afraid to spend money to attract stars. The Lakers have the NBA’s highest payroll this season, $99 million, for the fourth straight year. Buss could afford it. The Lakers operating profit averaged $37 million a year the past 10 years, which is second best in the NBA behind the Bulls.

The Lakers are in a huge transition period with Buss’ death. Buss was the longest-tenured NBA owner (a post now held by Clippers owner Donald Sterling). Buss was a regular at Lakers games, but he did not attend a game this year as his health deteriorated. Two of his kids, Jeanie and Jim, have been running the franchises with Jim focused on the player side and Jeanie concentrating on business. AEG, which owns a 27% stake in the Lakers, put itself up for sale last year.

Buss’ estate faces a massive tax bill with the soaring value of the Lakers, as he owned two-thirds of the billion-dollar franchise. The Lakers are expected to stay in the family thanks to its massive $3.6 billion television deal with Time Warner Cable, which kicked off this season. The 20-year deal includes a 5-year option that is expected to bring the total value to $5 billion.

If the Buss family needs to raise money to pay estate taxes, they have a benefactor in their backyard. Patrick Soon-Shiong, the richest man in L.A., bought a 5% stake in the Lakers from Magic Johnson in 2010 and could easily afford a bigger stake if the Buss family wants to raise any cash.


Choosing a successor for a business is an important step, but there are many more steps that may be necessary to help keep a large family business in the family. One of the main obstacles is to avoid estate taxes upon the death of the principle owner that could be as much as 40% after the first $5,250,000 in 2013, the year that Buss died. Without planning, a large tax bill could force a sale of a business or a sports franchise to make sure that it is paid. Strategies such as trusts and insurance to cover estate taxes could prevent the need to sell the business and make sure that it remains in the family. You do not have to be the owner of an NBA team to have a business as part of a taxable estate as many successful small businesses can cross the ever changing threshold of estate taxes. it is important to come up with a business succession plan with an estate planning attorney and possibly a CPA to make sure that a goal such as Jerry Buss had to keep the team in the family can become a reality.
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Re: Jeanie Buss spotted wearing ugly hat

Postby Rooscooter on Wed Mar 19, 2014 5:18 pm

The team is most likely leveraged and there are fiduciary requirements on spending and other decisions. It's not as simple as your making it out. This is a complicated ownership/partnership and the portfolio is more than the Lakers and is largely illiquid. Cash is needed to pay the governments for that value you noted......a freaking ton of it. Could be 400M and the governments don't have payment plans.....
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Re: Jeanie Buss spotted wearing ugly hat

Postby Vasashi17 on Wed Mar 19, 2014 6:03 pm

^*** I don't know Roos...I think you may be making it out to be more than it really is....I read somewhere that Jerry set out a trust in the name of his children in order to create exemptions or possibly bypass the inheritance/death tax altogether.

I did find this on a quick search, alluding to him working on something before his death. This was a quote taken in early 2009:

Despite all of his preparation, there is one thing papa Buss admits could derail the ownership plan: the inheritance tax: "It's a severe economic issue for me. It's an ongoing one, and I'm addressing it as best I can. I'm prepaying the taxes, and I'm keeping my fingers crossed that I live long enough to accomplish the whole thing."

Could it force a sale? "It could," he says. "There are rules and regulations, but we're getting to a point where I'm pretty sure my family can hold on to the team."


Then this in 2011, referring to the above quote:
Ironic in that, god forbid, had Buss died in 2010 there would’ve been no inheritance tax. But since that loophole has now closed, Buss needed TWC’s enormous cash infusion to ensure the Lakers would stay in the Buss family.
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Re: Jeanie Buss spotted wearing ugly hat

Postby Rooscooter on Wed Mar 19, 2014 6:23 pm

You don't bypass the death tax...... Trusts can delay it..... But they also mean that there is a trustee that cannot benefit from the trust..... I highly doubt the team is in a trust.

At death there is a tax based on the basis of the assets of the deceased. This year they are paying out a ton of money depending on the amount the Dr owned at the time of his death. Remember.... The Lakers are a part of all his assets.... A large part but not the only part.
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Re: Jeanie Buss spotted wearing ugly hat

Postby angrypuppy on Wed Mar 19, 2014 6:26 pm

Rooscooter wrote:The team is most likely leveraged and there are fiduciary requirements on spending and other decisions. It's not as simple as your making it out. This is a complicated ownership/partnership and the portfolio is more than the Lakers and is largely illiquid. Cash is needed to pay the governments for that value you noted......a freaking ton of it. Could be 400M and the governments don't have payment plans.....




The team is most certainly not leveraged, other than what you'd expect from continuing operations. The trust wouldn't be leveraged either. The trust itself was created to avoid estate taxes; it is probably an intentionally defective grantor trust (IDGT) or grantor retained annuity trust (GRAT).
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Re: Jeanie Buss spotted wearing ugly hat

Postby Rooscooter on Wed Mar 19, 2014 6:57 pm

angrypuppy wrote:
Rooscooter wrote:The team is most likely leveraged and there are fiduciary requirements on spending and other decisions. It's not as simple as your making it out. This is a complicated ownership/partnership and the portfolio is more than the Lakers and is largely illiquid. Cash is needed to pay the governments for that value you noted......a freaking ton of it. Could be 400M and the governments don't have payment plans.....




The team is most certainly not leveraged, other than what you'd expect from continuing operations. The trust wouldn't be leveraged either. The trust itself was created to avoid estate taxes; it is probably an intentionally defective grantor trust (IDGT) or grantor retained annuity trust (GRAT).


Neither of those avoid estate tax.... He either paid it on the way in or will on the way out. Everything is taxed above $12,500 when put in the trust and all control over the assets goes to an executor. Earnings or appreciation on the trust are taxable as well. If the trust is dissolved all tax is due on the original transaction.

I highly doubt the NBA's franchise agreement allows this type of sheltered arrangement as the league is a partner with all teams.

My guess is that they did a FLP arrangement of some sort.
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Re: Jeanie Buss spotted wearing ugly hat

Postby angrypuppy on Wed Mar 19, 2014 7:27 pm

No, GLATs and CRATs are quite common, and yes they absolutely minimize taxes on the transference of assets like small companies or even the shares of a large company like WalMart by the family Walton (trust me, the Waltons were not forced to pay tax above the $12,500 threshold for their holdings). The Buss family paid a fraction of what typical middle class Americans pay when a deceased father bequeaths his estate to his children. It might have been an FLP, but then FLPs have been targeted by the IRS in recent years which leads me to believe it was an IDGT or GRAT.

I still don't see how you could conclude that the Lakers are leveraged to the point where it has any impact on their decision making, and such leverage would not arise from any of the aforementioned estate planning trusts.
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Re: Jeanie Buss spotted wearing ugly hat

Postby Rooscooter on Wed Mar 19, 2014 10:22 pm

I arrived at that because entering that kind of trust ( I have one set up for my kids) most definitely is a taxable event and I highly doubt that a NBA team can be held in a trust. The rights to the franchise are not a singular and I'm pretty sure they cannot be held in a trust.
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Re: Jeanie Buss spotted wearing ugly hat

Postby angrypuppy on Thu Mar 20, 2014 5:52 am

Roos, any operating asset can be held in trust. That's how many small business owners transfer ownership rights to their offspring, retain control and yield operations upon death... in the Lakers case it is a form of voting rights that are probably not equal shares among the kids (the latter is my speculation). Estate planning is not my province though it is part of my background.

It really doesn't matter. The point is that no matter how the estate is structured, both the Lakers and the family trust are not encumbered with meaningful debt.

Still, I do believe that you were hitting on the periphery of something very important. I do believe that cash flows, while healthy, are not as dandy as they seem, at least from Time Warner. Like most media contracts, there are likely audience targets that have been missed. What is curious is that the Lakers front office has a rather bizarre view of finances, one that seems highly reactive. Lockout? Fire everyone. Can't find a pick or prospect for Pau? Eat the contract, despite its material impact on profitability.
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Re: Jeanie Buss spotted wearing ugly hat

Postby Rooscooter on Thu Mar 20, 2014 6:28 am

angrypuppy wrote:Roos, any operating asset can be held in trust. That's how many small business owners transfer ownership rights to their offspring, retain control and yield operations upon death... in the Lakers case it is a form of voting rights that are probably not equal shares among the kids (the latter is my speculation). Estate planning is not my province though it is part of my background.

It really doesn't matter. The point is that no matter how the estate is structured, both the Lakers and the family trust are not encumbered with meaningful debt.

Still, I do believe that you were hitting on the periphery of something very important. I do believe that cash flows, while healthy, are not as dandy as they seem, at least from Time Warner. Like most media contracts, there are likely audience targets that have been missed. What is curious is that the Lakers front office has a rather bizarre view of finances, one that seems highly reactive. Lockout? Fire everyone. Can't find a pick or prospect for Pau? Eat the contract, despite its material impact on profitability.


A family business.... Yes.... A franchise? Not so sure. There are other entities encumbered by the trust that both benefit and are limited and franchises are not a traditional business. Believe me, I've been through the ringer on this with some diverse holdings I have. Taxes are most definitely owed on entry..... I've got the audits and associated attorney fees to prove it... :man1:

As for cash flow..... That is the issue IMO. Depending on the current ownership arrangement and the scale of the TV contract I'm sure it isn't what most people think. Regardless the new CBA puts a threshold in place that no matter the revenue there is a point where spending beyond a certain amount is bad business.
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Re: Jeanie Buss spotted wearing ugly hat

Postby angrypuppy on Thu Mar 20, 2014 6:57 am

That's because I haven't audited you yet (j/k, I'm a CPA but I do not practice, and I could never work for the IRS as my parents were married). The franchise itself is just a corporation with shares, as is Staples. As non-publicly traded corporations, the shares and appreciation could easily be sheltered in any of the aforementioned tax avoidance vehicles (especially with the Treasury interest rates being at record lows) while being operated by daddy and then passed to the heirs upon his demise. On the surface it is that simple, though the value is layered between the legalese in the trust structure and trust agreement.

As an aside, I may be a Lakers fan and I thought Dr. Buss was a great owner, but I do feel strongly that they should taxes like everyone else. This is how the 1% (more like 0.5%) sustain their power, and indirectly this is the reason why the struggling middle class is burdened with financing this country. I'll get off the soapbox, but it does stink.

Despite any fluctuations in TWC revenue the Lakers have to transfer a fixed sum to the league per the latest CBA. That sum is then redistributed to the other billionaires and millionaires who feel that they have a right to run their franchises poorly and still be guaranteed a profit.

This is a strange post, but that's the big picture. We run the country like a fiefdom so that the royals pass their dukedoms on to the heirs while the serfs continue to pay. In contrast the NBA is run like a socialist state where the income is mindlessly redistributed. As Yakov Smirnoff once said, what a country.
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Re: Jeanie Buss spotted wearing ugly hat

Postby LakerFanIam on Thu Mar 20, 2014 8:42 am

I dunno 'bout GLAT or CRAT... But that hat sure is CRAP... :man1:
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Re: Jeanie Buss spotted wearing ugly hat

Postby XXIV on Thu Mar 20, 2014 12:15 pm

Jeanie is on 710 espn radio right now.
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Re: Jeanie Buss spotted wearing ugly hat

Postby Lakerjones on Thu Mar 20, 2014 12:45 pm

Interesting conversation.
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Re: Jeanie Buss spotted wearing ugly hat

Postby Weezy on Thu Mar 20, 2014 12:47 pm

Lakerjones wrote:Interesting conversation.


Short recap anyone?
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Re: Jeanie Buss spotted wearing ugly hat

Postby lakersyunowin on Thu Mar 20, 2014 12:54 pm

ongoing...here's a snippet from just now that left me baffled:
some caller basically asked why he should keep his season tickets. so jeanie tried to point to bright spots in the season and she mentioned being able to see lebron play during the christmas day game. she then said you'd miss seeing people at the game like the parking lot guy, or the guy behind you telling jokes.

wat.
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Re: Jeanie Buss spotted wearing ugly hat

Postby Rooscooter on Thu Mar 20, 2014 1:00 pm

angrypuppy wrote:This is a strange post, but that's the big picture. We run the country like a fiefdom so that the royals pass their dukedoms on to the heirs while the serfs continue to pay. In contrast the NBA is run like a socialist state where the income is mindlessly redistributed. As Yakov Smirnoff once said, what a country.


MeSerf…..
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Re: Jeanie Buss spotted wearing ugly hat

Postby pound4pound1 on Thu Mar 20, 2014 1:14 pm

lakersyunowin wrote:ongoing...here's a snippet from just now that left me baffled:
some caller basically asked why he should keep his season tickets. so jeanie tried to point to bright spots in the season and she mentioned being able to see lebron play during the christmas day game. she then said you'd miss seeing people at the game like the parking lot guy, or the guy behind you telling jokes.

wat.



tea, she goes 'well, look we beat the clippers after they covered our banners'


thanks, Jeanie...that totally restored some Laker pride in that season ticket holder
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Re: Jeanie Buss spotted wearing ugly hat

Postby therealdeal on Thu Mar 20, 2014 1:30 pm

That's one question she struggled with, but it's a really tough question and I'd expect most people to struggle with it. She went on to ask that we keep the faith and wait until things settle down this summer since we have a lot of room for growth in the coming months.

I thought it took a lot of balls to come out and do what she did. Hopefully she does another one soon and hopefully Mitch can do one some time before the draft. I'd love if Jim did one, but I doubt he would.

I thought it was very interesting that Jeanie basically put herself out in front of Jim. She said all final decisions come to her and that she has final say on any moves. Basically she claimed responsibility for the team we see now. Interesting move. Not only does it take some heat off of her brother, but she basically made herself out to be Doctor Buss. She's claiming to be the 3rd head of the 3 headed monster.
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