XXIV wrote: LakersN4 wrote: therealdeal wrote: Savory Griddles wrote:
therealdeal wrote:I really don't see it being that much of an issue. With Dr. Buss being sick as long as he was and these being wealthy, prudent people financially I don't think they'd have let that tax hit come as a big surprise. I'm sure they saved up accordingly and made it through that without too much trouble. It probably bit into their profits a bit, but I can't imagine it made a big enough hole to really stop them from spending now.
Case in point: they spent last season with a massive payroll and a starting five that was paid astronomically well while preparing for their father's death. Wouldn't it make sense to start cutting payroll much sooner if they were that worried about it?
I don't really know the answer to that. I don't think any of us know what the ramifications of the inheritance tax were on them.
No we don't. All I know is that a prudent person with moderate wealth can prepare for a death they see coming. I'd think a person of great wealth could prepare for a death they see coming as well, probably more effectively. I'm not saying the tax hit didn't hurt at all, I'm saying Dr. Buss was dying for a long time. I find it hard to believe there wasn't something built up to help fight that tax hit.
Yeah actually I remember reading an article that said he has been pre-paying towards it for several years now.
I also remember reading something along the lines that he wanted to make sure when he died his kids didn't have to worry about the tax.
I want to say that he sold AEG the shares they currently own just for this reason, but I can't say for certain if that was even the case. Does anyone know how/when AEG acquired their shares?
You must have missed that when it was happening. Well it was long ago, so let me explain.
Yes, estate taxes were the reason Jerry Buss sold a 25% share of the team to AEG. He did that at least 10 or so years ago as he was already having health issues and he wanted to ensure that his kids could keep the Lakers after he was gone. Have to remember most of the family's wealth is tied up in the team which would have had to be sold to pay the estate taxes if he hadn't done that. The old man protected against that in two ways: selling an interest in the team and with the TWC contract. The TWC contract was crucial in that it provided the collateral for any line of credit the kids might have needed to pay the estate taxes and keep operating the team.
As an aside, the O'Malley family was facing the same issue with their ownership of the Dodgers. Peter O'Malley co-owned the team with his sister, Terry Seidler. But while O'Malley was ready to retire from running the team, the subsequent generations of their families were not all that interested in stepping up to succeed him, hence O'Malley and his sister sold the team and put the proceeds into a trust that was to benefit their heirs. Now it must be said that O'Malley did participate in a group that put in a bid to buy the Dodgers from Frank McCourt before withdrawing that bid and subsequently led that team to buy the San Diego Padres. But here, O'Malley is only part of an ownership team, he didn't commit all he has.
Hope this little digression provided an education.
Now back to matters Kobe....