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Started By
Message
A question about this Benson family issue.
Posted on 1/23/15 at 12:21 pm
Posted on 1/23/15 at 12:21 pm
So its tom Benson who of owns all his businesses and he's pretty much free to do with them as he pleases right? So why does his kids or grandkids for that matter feel entitled to anything? I mean if I have 100 bucks I can give it to whomever I please and wouldnt have to divide it up with among my family, so how is this situation different?
3
Posted on 1/23/15 at 12:25 pm to Chad504boy
Starting to dislike that song BC its being overplayed
Posted on 1/23/15 at 12:26 pm to SaintlyTiger
He has previously placed the assets in an irrevocable naming those family members as beneficiary. Changes everything.
Now the courts are involved and they will decide.
Now the courts are involved and they will decide.
Posted on 1/23/15 at 12:30 pm to Sid in Lakeshore
But forgive me if I'm wrong but isn't that his right?
Posted on 1/23/15 at 12:32 pm to SaintlyTiger
quote:
But forgive me if I'm wrong but isn't that his right?
Not any more. It was his right until he put the assets in an irrevocable trust (for estate tax planning purposes). I'm no expert, but from what I understand, if he wants to remove the assets from the trust, he must replace them with assets of a relatively equal value.
ETA: read the article that has been linked already. It may help you understand. LINK
This post was edited on 1/23/15 at 12:34 pm
Posted on 1/23/15 at 12:35 pm to kennypowers816
quote:
Not any more. It was his right until he put the assets in an irrevocable trust (for estate tax planning purposes). I'm no expert, but from what I understand, if he wants to remove the assets from the trust, he must replace them with assets of a relatively equal value.
Correct and Benson doesn't have an additional 2 billion to pledge as replacement equal value.
Posted on 1/23/15 at 12:37 pm to MrLSU
Isn't there some wiggle room on what value is placed on the Saints and Pelicans? I thought for tax purposes he could keep the value lower. Maybe that doesn't apply to removing them though. Very complicated issue it seems like.
Posted on 1/23/15 at 12:56 pm to statman34
quote:
Isn't there some wiggle room on what value is placed on the Saints and Pelicans? I thought for tax purposes he could keep the value lower. Maybe that doesn't apply to removing them though. Very complicated issue it seems like.
For estate/gift tax valuation purposes, there are normally all kinds of discounts you can take, e.g., lack of control discount, lack of marketability discount, etc.
But, those discounts don't apply when you transfer the whole NFL/NBA team and you make the transfer in trust.
This post was edited on 1/23/15 at 12:57 pm
Posted on 1/23/15 at 1:24 pm to SaintlyTiger
Words of wisdom from my dad. Never give, lend, or loan anything to anyone under the assumption that you will get it back or have it retuned in the condition that it was given. He said if you did the deed with this in mind, you did it because you cared about the person or really wanted to help them, even if it cost you a little. This might cost Mr.Benson a lot.
Posted on 1/23/15 at 1:30 pm to statman34
quote:It is. The Forbes "value" is simply an estimated sales value, not an appraisal. It does not take into account how much of the "sales value" would actually be used for assuming debts, etc. The actual appraised value will be much less. I am still not sure that he would have the assets to replace the teams without at least having them as minority owners.
Isn't there some wiggle room on what value is placed on the Saints and Pelicans? I thought for tax purposes he could keep the value lower. Maybe that doesn't apply to removing them though. Very complicated issue it seems like.
Posted on 1/23/15 at 1:40 pm to NOSHAU
quote:
The actual appraised value will be much less.
Not necessarily.
The "appraised" value must still be the fair market value. And, that is the price a willing buyer is willing to pay a willing seller with neither under any compulsion to enter into the transaction.
So, if there is someone out there who is willing to pay $2 billion for the Saints, THAT'S the value.
Just look at the Clippers. I think they were valued at about $1 billion by Forbes before the auction. But, Steve Ballmer offered $2 billion.
Everything must be taken into consideration. Hell, even the Clippers sale might affect the Saints valuation (it will definitely affect the Pelicans FMV). Given that the Saints have sold out for the last 10 years, and that they have a REALLY SWEET deal with the state, etc. it will really add to the value. Surely, you would think that they will definitely be worth more than the Buffalo Bills which reportedly are being sold for over $1 billion.
So, while Forbes is probably in the ballpark, you never know. Just like the Clippers, I'm sure an IRS expert would value the Saints at much more than $1 billion -- probably in the $1.5 billion range. And, given the recent Clippers sale, the Pelicans could be upwards of a billion.
Posted on 1/23/15 at 1:57 pm to NOSHAU
Valuation of these types of assets are difficult - it's not like appraising a house where there are a ton of comps around. The Forbes numbers are a quick glance. A full blown business appraisal would go into a lot more detail, but at the end of the day, it's still an estimate of value. With assets like this, you really don't know what it's worth until someone tries to buy it.
And in terms of a substitute asset... the valuation becomes very important and a subject of litigation.
And in terms of a substitute asset... the valuation becomes very important and a subject of litigation.
Posted on 1/23/15 at 2:02 pm to MMauler
quote:The appraisal has to also include the cash flows and debt coverage (which Forbes does not). When you see a buyer "pay" $2 billion or whatever for a team, that is usually not the cash value but includes a large assumption of debt/liabilities. When the liabilities are netted against the purchase price, the true value from an appraisal standpoint may be less.
Not necessarily. The "appraised" value must still be the fair market value. And, that is the price a willing buyer is willing to pay a willing seller with neither under any compulsion to enter into the transaction. So, if there is someone out there who is willing to pay $2 billion for the Saints, THAT'S the value. Just look at the Clippers. I think they were valued at about $1 billion by Forbes before the auction. But, Steve Ballmer offered $2 billion. Everything must be taken into consideration. Hell, even the Clippers sale might affect the Saints valuation (it will definitely affect the Pelicans FMV). Given that the Saints have sold out for the last 10 years, and that they have a REALLY SWEET deal with the state, etc. it will really add to the value. Surely, you would think that they will definitely be worth more than the Buffalo Bills which reportedly are being sold for over $1 billion. So, while Forbes is probably in the ballpark, you never know. Just like the Clippers, I'm sure an IRS expert would value the Saints at much more than $1 billion -- probably in the $1.5 billion range. And, given the recent Clippers sale, the Pelicans could be upwards of a billion.
Posted on 1/23/15 at 2:10 pm to NOSHAU
quote:
When you see a buyer "pay" $2 billion or whatever for a team, that is usually not the cash value but includes a large assumption of debt/liabilities.
These teams are cash cows. Not too many are carrying any significant amount of debt.
Tom Benson put together a group of investors who paid $85 million for the team in 1985. The deal gave Benson the right to buy out the other investors over time. He did that - YEARS AGO. He's owned this team outright for decades.
There should be no debt for a buyer to assume.
It was basically the same for the Clippers except the Donald Sterling only paid $12.5 million for the Clippers about 3-5 years earlier than when Benson bought the Saints.
This post was edited on 1/23/15 at 2:11 pm
Posted on 1/23/15 at 8:06 pm to MrLSU
quote:
Correct and Benson doesn't have an additional 2 billion to pledge as replacement equal value.
He really doesn't need $2 billion. He just needs to take enough percentage of the teams out of the trust to give Gayle a majority interest and replace that value.
Posted on 1/23/15 at 9:46 pm to MMauler
quote:
Tom Benson put together a group of investors who paid $85 million for the team in 1985. The deal gave Benson the right to buy out the other investors over time. He did that
BTW, those original investors did pretty well (the Hermans, etc.)
Posted on 1/24/15 at 8:32 am to VOR
I think there were about 2 or 2-1/2 dozen minority owners @ 1 to 2% each. I'm pretty sure Benson's original ownership stake was something like 52%.
Posted on 1/24/15 at 8:36 am to White Roach
Anybody know what Rita's been up to?
I'd move out of LA after all this.
I'd move out of LA after all this.
Posted on 1/24/15 at 12:44 pm to NOFOX
quote:
He really doesn't need $2 billion. He just needs to take enough percentage of the teams out of the trust to give Gayle a majority interest and replace that value.
There is absolutely ZERO percent chance a trustee would agree to that. He would be f*cking over the beneficiaries that he is put there to protect. He would be sued -- and would lose his shirt. The only way that could even be considered is if the beneficiaries would agree. And, what do you think the odds of that happening are?
Who in the f*cking world would AGREE to give up majority interest?
THAT is why there are minority discounts. A 49% interest (where one other person owns 51%) is worth WAY LESS than 51%, i.e., it's not just the value of 2%.
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