Ballot Measure 40 Targets California Sports Owners

Voters in California will decide Nov. 3 whether to impose a one-time 5% tax on the assets of billionaires, a move that could directly affect the owners of several major professional sports teams.

The measure, known as Proposition 40, targets wealthy residents who live in the state. It was designed to raise funds for healthcare after federal cuts signed by President Trump last year are expected to cost California an estimated $100 billion.

Whether a specific owner pays the tax depends on their residency status, a determination made by the California Franchise Tax Board. The board considers factors like where mail is delivered, where doctors and lawyers are located, and the number of days spent in the state.

Owners of the Los Angeles Lakers, Los Angeles Clippers, San Francisco 49ers, and other teams may be subject to the levy if they are deemed California residents. For example, Bob Iger, who agreed to buy the Lakers in August, lives in California, while his partner Joshua Kushner lives in New York. Iger would likely pay the tax, while Kushner would not.

Other potential targets include Joe Lacob and Peter Guber of the Golden State Warriors, and Hasso Plattner of the San Jose Sharks. Owners like San Kroenke of the Los Angeles Rams and Steve Ballmer of the Clippers may avoid the tax if they are classified as non-residents.

Leigh Steinberg, a sports agent who has represented more than 300 athletes, warned that the tax creates an uneven playing field. He argued that out-of-state owners gain an advantage and that increased costs will likely be passed on to fans through higher ticket and concession prices.

David Gamage, a tax law professor at the University of Missouri, countered that the tax would help reduce healthcare costs, keeping prices for goods like hot dogs lower. He criticized opponents for implying the tax would primarily hurt consumers.

A poll released Thursday by UC Berkeley’s Institute of Governmental Studies found that half of likely voters oppose the measure, while 42% support it. Opponents have raised nearly $368 million for their campaign, compared to $36.5 million for proponents, according to the California Secretary of State’s Office.