Stephen Ross, the chairman and CEO of Related Companies, has shown no interest in selling the Miami Dolphins despite the team’s poor performance this season. According to a report from the Miami Herald, one major reason is the significant capital gains taxes that would be incurred if he were to sell.
Ross has been the majority owner of the Dolphins since 2009. Over recent years, he has reduced his stake in the team to 84.5 percent by selling portions to other investors. For example, last year Ross sold 13 percent of the franchise to private equity firm Ares and Brooklyn Nets owner Joe Tsai, which likely resulted in more than $150 million in capital gains taxes.
If Ross were to sell his remaining share in both the team and Hard Rock Stadium for a hypothetical $10 billion, he could face a tax bill exceeding $1 billion. The Internal Revenue Service allows families to avoid capital gains tax if assets are sold after an owner’s death; however, this would trigger an estate tax estimated at over $2.5 billion that must be paid within nine months.
Ross first invested in the Dolphins in 2008 when he acquired 95 percent of the franchise for $1 billion and later invested more than $700 million into stadium renovations. Under his ownership, Hard Rock Stadium has hosted events such as Formula One races, the Miami Open tennis tournament, and will host FIFA World Cup games next year.
There have been attempts by other wealthy individuals to purchase the team. Citadel founder Ken Griffin reportedly tried but negotiations did not lead to a sale. In addition, an unnamed buyer made a $10 billion bid for the Dolphins within the past two years without success.
Ross appears intent on keeping ownership within his family. Three years ago, he named his daughter Jennifer as his successor with regard to control of the franchise.
Previously considered as a possible successor was Bruce Beal, president of Related Companies; however, Beal was passed over around the time both he and Ross faced NFL penalties for violating anti-tampering policies related to efforts involving Tom Brady and Sean Payton.
“— Holden Walter-Warner”
