Stephen Ross, the majority owner of the Miami Dolphins, has shown no interest in selling the football team despite its current struggles in the NFL standings. According to reporting by the Miami Herald, a significant factor behind this decision may be the large capital gains taxes that would come with such a sale.
Ross, who is also chairman and CEO of Related Companies based in West Palm Beach, has owned a controlling stake in the Dolphins since 2009. Over recent years, he has reduced his share to 84.5 percent by selling portions of his ownership. In one scenario outlined by the Herald, if Ross were to sell his share of the team and Hard Rock Stadium for $10 billion, he could face more than $1 billion in capital gains taxes.
Last year, Ross sold 13 percent of the franchise to private equity firm Ares and Brooklyn Nets owner Joe Tsai. This transaction likely resulted in over $150 million in capital gains taxes.
The Internal Revenue Service allows heirs to avoid capital gains tax if they sell after inheriting an asset due to what is known as a step-up in basis. However, this would trigger an estate tax potentially exceeding $2.5 billion if Ross’s family were to sell after his death, with payment required within nine months.
Ross first invested in the Dolphins in 2008 when he acquired 95 percent of the team for $1 billion and subsequently invested over $700 million into renovating their stadium in Miami Gardens. Under his leadership, major events such as Formula 1 races, the Miami Open tennis tournament, and next year’s FIFA World Cup games have been brought to Hard Rock Stadium.
Billionaire Ken Griffin reportedly tried but failed to purchase the Dolphins from Ross. An unnamed buyer also made a $10 billion bid for the team within the past two years without success.
Three years ago, Ross named his daughter Jennifer as his successor with regard to ownership of the Dolphins. Bruce Beal, president of Related Companies, was previously considered for succession but was passed over around the time both he and Ross faced NFL penalties for violating anti-tampering policies related to Tom Brady and Sean Payton recruitment efforts.
