A $12.5 Billion Bet With a Built-In Tax Advantage
Thrive Capital founder Joshua Kushner and former Disney CEO Bob Iger are closing in on a record $12.5 billion deal to acquire the Los Angeles Lakers — and the headline price is only part of the story. Behind the glamour of the NBA's most iconic franchise sits a tax structure that wealth managers call one of the most powerful shelters available to high-net-worth investors.
Under the deal, Kushner, Iger, and outside investors expected to participate in the financing would own roughly 83% of the franchise after the Buss family agreed to sell its stake. (Jeanie Buss is legally contesting her siblings' plan to sell.)
The Tax Mechanics Are Straightforward — and Enormous
Sports industry analyst Joe Pompliano laid out the playbook on X: once the deal closes, the new owners are expected to allocate 90% or more of the purchase price to intangible assets. Those assets — player contracts, media rights, brand goodwill — are then amortized over 15 years under Section 197 of the tax code, generating deductions that can be applied against team income and, critically, against income from other sources.
As much as 80% of a sports team's value is typically comprised of intangibles, including the goodwill attached to high-quality brands. That means a $12.5 billion acquisition can produce paper losses running into the hundreds of millions of dollars annually, even as the underlying business remains profitable and the asset appreciates.
Ram Ahluwalia, founder of Lumida Wealth Management, put it plainly on X: 'It's a powerful tax shield. My guess is he is preparing to offset a boatload of carried interest income. If you own a sports team, done correctly, you can get a deduction against income.'
Why Kushner's Timing Makes Sense
Kushner is not new to sports ownership. He previously held a minority stake in the Memphis Grizzlies, sold it, and acquired a small stake in the Miami Heat — which he must now divest to complete the Lakers purchase. Earlier this year, his Thrive Eternal capital holding company also bought a minority stake in the San Francisco Giants.
The Lakers deal, however, is a different order of magnitude. Ahluwalia noted that Kushner is likely sitting on substantial gains from holdings in SpaceX, OpenAI, and Stripe. A $12.5 billion acquisition structured around intangible-asset amortization is a logical instrument for managing that tax exposure — and more favorable, according to Ahluwalia, than owning real estate.
OpenAI CEO Sam Altman has previously described Kushner as someone who makes 'high-conviction bets.' At $12.5 billion, this one qualifies.
The Bigger Picture
The Lakers transaction illustrates a principle that free-market advocates have long understood: the tax code rewards capital deployment. Section 197 was not designed as a loophole — it reflects the legitimate economic reality that intangible assets lose value over time and that investors deserve to recover their basis. The fact that sports franchises simultaneously appreciate in market value while generating paper losses is a feature of rational accounting, not an abuse of it.
What the deal also confirms is that private capital continues to flow toward hard assets with durable brand value — exactly the kind of long-duration investment that a stable rule of law and clear property rights make possible. The taxpayer is not writing a check here; the structure simply allows owners to keep more of what they earned. In a high-tax environment, that distinction matters.
