Joshua Kushner and Bob Iger $12.5B Lakers Purchase Leverages Section 197 Tax Shield

Thrive Capital founder Joshua Kushner and former Disney chief executive officer Bob Iger have agreed to acquire approximately 83% of the Los Angeles Lakers in a deal valuing the NBA franchise at $12.5 billion, leveraging tax code rules that turn sports team intangibles into massive income shields.

Kushner previously owned a minority stake in the Memphis Grizzlies, then sold it and bought a small stake in the Miami Heat, which he must sell to buy the Lakers. And earlier this year, he bought a minority stake in the San Francisco Giants. If the Lakers deal is approved, however, Kushner and Iger will own about 83% of the iconic NBA franchise after the Buss family agreed to sell its share. (Jeanie Buss, however, is legally contesting her siblings’ plan to sell the stake.)

Lumida Wealth Management founder Ram Ahluwalia noted that the acquisition functions as a powerful tax shield, allowing Kushner to offset substantial carried interest income generated from high-value venture capital holdings in SpaceX, OpenAI, and Stripe. Owning a professional sports franchise provides tax deduction benefits that exceed traditional real estate investments, as owners can amortize media rights, player contracts, and stadium assets to lower their overall tax liability even while the franchise appreciates in valuation and operates profitably.

The statutory mechanics governing this write-off stem from the American Jobs Creation Act of 2004, which repealed former Section 1056 tax provisions and placed sports franchises under Section 197 of the Internal Revenue Code. Prior to that federal legislative change, team buyers were limited to amortizing player contracts over short windows, but the modern tax framework permits franchise owners to claim up to 80% or more of a team’s total valuation in intangible assets and goodwill as depreciable losses.

Sports industry analyst Joe Pompliano predicted that as soon as the Lakers deal closes, the new owners will allocate 90% or more of the price tag to intangible assets. “Kushner and Iger will then amortize these assets over 15 years under Section 197 of the tax code, allowing them to deduct the amortization against team income,” he said on X last week.

Applying a 90% allocation to the $12.5 billion transaction yields approximately $11.25 billion in intangible assets, enabling Kushner and Iger to claim roughly $750 million in annual amortization deductions over a 15-year period. Reporting from ProPublica on professional sports team tax filings shows that team owners frequently utilize these non-cash paper losses to neutralize personal taxable income derived from outside commercial investments.