NFL Panthers Rookie Owner Already Gets the Tax Game
(Bloomberg Opinion) -- Say this for David Tepper: He’s a fast learner.
The founder and managing partner of Appaloosa Management LP, Tepper is something of a legend among hedge fund managers. In 2009, for instance, his compensation was reported to be $4 billion. His net worth is $11.2 billion, according to the Bloomberg Billionaires Index. When Tepper relocated from New Jersey to Florida, taking Appaloosa with him, one state official testified that the loss of so much tax revenue might create a large shortfall in the New Jersey’s budget.
Tepper grew up in Pittsburgh and for years was a minority partner in the National Football League’s Pittsburgh Steelers. Last year, after the owner of the Carolina Panthers, Jerry Richardson, was accused of sexually harassing three former employees, he put the team up for sale. Tepper swooped in and bought it. Richardson had paid $206 million in 1993 for the expansion franchise; Tepper paid $2.3 billion for the team — in cash.
At the time, Tepper vowed that he would not move the team out of Charlotte, North Carolina. He also said that one of his priorities was to build the team a new practice facility. He did not say that the practice facility — or, for that matter, the team’s headquarters — would stay in Charlotte, too.
Fast forward to this offseason. On Wednesday, Tepper took a trip to Columbia, South Carolina, the state capital. He spoke with Governor Henry McMaster and other state officials about relocating everything except the games themselves to York County, about a half-hour’s drive from Charlotte. He would build the new practice facility there, as well as a headquarters for the team’s 150 employees. And, Tepper told the governor, he also hoped to develop a retail and entertainment complex in York County.
South Carolina does not have a pro sports team, so even the idea of landing an NFL practice facility was very exciting. After the meeting, McMaster held a news conference in which he announced that the legislature would make a priority of passing a bill to ensure that the Panthers were eligible for economic incentives and tax breaks. He made it sound as if it were a done deal.
Which, of course, it’s not. Tepper may be a newbie NFL owner, but he’s quickly mastering the tried-and-true tactic of billionaire sports owners everywhere: play one community off another until one gives away the store to keep (or lure away) a team. According to the editorial board of the Charlotte Observer, there are areas in Charlotte that are perfect for the new practice facility and headquarters. And wouldn’t you know it — Panthers executives have also been in discussions with North Carolina officials to see what kind of tax breaks the team could get if it kept its front office employees in the state.
Oh, and I almost forgot. At the same time as Tepper was playing footsie with South Carolina, Mecklenburg County was revaluing Bank of America Stadium in Charlotte, where the Panthers play. It concluded that the stadium was worth $572.3 million — a number largely based on the hefty price tag Tepper had paid for the team. If that number sticks, it means the Panthers will pay an additional $4 million in property taxes.
The Panthers already have a sweet deal when it comes to paying local taxes. According to the Charlotte Observer, last year the state legislature passed a bill that allows the Panthers to avoid paying property taxes on 34 acres the team leases (for $1 a year!) from the city. Nonetheless, the team appealed the revaluation, claiming the stadium was worth only $87.2 million, or 85 percent less than the county’s estimate. This news broke — gosh, what a coincidence! — the same day Tepper met with the governor of South Carolina. I wonder how that’s going to turn out.
Speaking of Bank of America Stadium, did you know that it was built in 1996, making it one of the oldest stadiums in the NFL? Sure it’s been renovated — with the help of $75 million from Charlotte taxpayers — but Tepper is now talking about putting a roof on it. The next move, according to the billionaire sports owner’s playbook, is for him to complain that his aging stadium lacks the amenities of newer venues — and that he needs the government to help him build something a little more state-of-the-art. And if it won’t, well, there’s always another locale just dying for an NFL team. Like, say, South Carolina.
I’m not saying David Tepper is going to do that. But he’s proved to be a fast learner, so I wouldn’t put it past him.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. He is co-author of “Indentured: The Inside Story of the Rebellion Against the NCAA.”
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