The new Republican-backed tax plan, aimed at curbing tax breaks for team owners, could significantly impact NHL teams and their fans. Here's a detailed look at the potential consequences and what it means for the sports industry.

How the Proposal Applies to Sports Teams

When purchasing a team, the deal often includes tangible assets like stadiums or real estate. However, the majority of the purchase price is attributed to intangible assets such as the team's brand, broadcast revenue, and sponsorships. Currently, owners can deduct the value of these intangible assets as a business expense over 15 years. This law, in place since 2004, was designed to help business owners write off assets that decline in value over time.

What the Proposal Says

The new tax bill would allow owners to write off only 50% of the value of their intangible assets for teams acquired after the bill becomes law. This change aims to prevent taxpayers from subsidizing billionaires' purchases of sports franchises. Some owners use these deductions to lower or even eliminate the taxes they owe on team profits.

Ramifications for Owners and Fans

Experts suggest that the bill could make teams more expensive for prospective buyers. Owners might pass the increased tax burdens onto fans through higher ticket prices, merchandise, and streaming costs. Additionally, higher taxes could drive down the price potential buyers are willing to pay for teams, affecting player contracts, stadium amenities, and overall team investments.

Impact on Emerging Leagues

The proposal could pose larger challenges for upstart and women's sports franchises, where fewer tax breaks could make investment rationales more difficult to justify. This could have a cooling effect on new and innovative sports franchises, where an even larger share of a team's value is intangible assets.

What's Next?

The proposed tax bill is part of President Donald Trump's sweeping economic plan and must work its way through some procedural measures before facing a vote by the House and U.S. Senate. The Trump administration has previously stated its desire to end 'all the special tax breaks for billionaire sports team owners.'

Stay tuned for more updates on how this tax bill could reshape the landscape of professional sports, particularly in the NHL.