With the death of the Chargers’ controlling family patriarch, Alex Spanos, this week, many have begun to wonder if the remaining family members will be forced to sell the team. The concern stems from the estate taxes that fall to surviving beneficiaries. It is not uncommon for families to be forced to liquidate assets to pay for the required taxes (the IRS would not accept, for instance, 20% of a team. They deal in cash). According to Mike Florio of NBC, a source close to the family has revealed that they’ve done their homework in advance.
Although the Spanos family also has significant real estate dealings, the Chargers franchise remains the single largest asset of the family and the main source of income for the controlling partners.
While the challenge of estate taxes will not be avoided entirely, a process was begun in 1998 to significantly ease the eventual burden. In 2006, Alex Spanos transferred 60% of the team’s control to his children, with Dean Spanos serving as the controlling owner. Alex and his wife, Faye, now both deceased, controlled 36% of the team. The remaining 4% are owned by associates of the Gene Klein ownership regime.
The original plan from 1998 indicated that the parents’ 36% of the team would go directly to the controlling siblings, though Dean Spanos will remain the controlling owner. There is no indication that that has changed. What this does mean is that the 36% will be split between the surviving family owners, perhaps by an equal amount of 9% each.
This effectively eases the burden on each family member to what is presumably a manageable amount. The specifics are not released and they are not known, but the source of this information also indicates that “the family will not be selling any of the team, and no plans exist to sell any of the team in the future.”
Like it or not, they are eager to give things a try in their massive new stadium before considering any drastic changes. The full scope and intent of Alex Spanos’ plans was centered around keeping the team as a resource for the family for as long as they would like it. The plan was well-considered and has all but guaranteed exactly that. The Chargers won’t be changing hands unless the family decides they are no longer interested in running it or the NFL forces a change, a highly unlikely scenario.
-Jason “I’m Not Playing Fauvists” Michaels