There are few things that strike up a conversation at the office more than the Powerball. Okay, maybe “The Bachelor” and if you think “Making a Murderer” focal point Steven Avery did the crime or not but not much else. Everyone is asking the same question and thinking of all the possible things you can do with $1.5 billion (and counting).
I’ve gone over this scenario a million times in my own head. What I would do with the money. How I would spend it. Most of my ideas start and finish with paying off bills and retiring to a local dive bar with cheap drinks and good wings. But the sports fan in me was intrigued by the notion of owning a team.
Now let’s get one thing clear. No one is taking the entire Powerball jackpot home. First, taking the lump sum cuts into your winnings by around 38 percent. So you’re already down to around $930 million cash value (based on $1.5 billion jackpot). Second, the government is going to tax you at the highest rate they can, around 39.6 percent. The first 25 percent is automatically withheld because it is such a large sum of winnings. The other 14.6 percent can be put off until tax time 2017, so that’s a bit of a break. Factor in state and local taxes and the amount of ACTUAL money you can be taking home is around $420 million, give or take.
Like anything else in the world of money, there are things you can do to cut down on the amount of money you lose to taxes. You can gift the money to a spouse or give some to charity but none of that is going to lessen the sting of knowing that $1.5 billion is nowhere near the amount you will actually receive. That’s still a nice chunk of change for any of you reading this article.
So you have to be smart with your money. Invest. Take the money and make money. And what better way to do that than to buy a sports team? The business of sports is growing each and every year. So I started thinking of how I could get into the game. During my search, I stuck with the four big leagues in the U.S., the NFL, MLB, NBA and NHL.
The unfortunate part of my search was that sports teams aren’t cheap. Teams are worth more than ever before. Not one NFL, MLB or NBA team could be bought solely with the Powerball winnings. You would need partners. Now, some might see that as an easier road. Just spend enough to become a partner and let someone else make all the choices on what the team does as you sit back and hopefully rake in the benefits. But If I’m going to buy a team, I would want it to be mine. I would want to make all the decisions. So in that case, with being the sole owner, you really only have one option; the NHL.
According to Forbes, more than half of NHL teams, 16 to be exact, are valued at $400 million or less. This includes the Anaheim Ducks, Minnesota Wild, Ottawa Senators, Colorado Avalanche, New Jersey Devils, New York Islanders, Buffalo Sabres, Tampa Bay Lightning and Nashville Predators. Some teams are worth more and others have less debt but let’s be real, as a Powerball winner, you’re going to buy a team that you like or that is close to where you want to live.
Still, for $400 million it looks like you could own a professional team and in most cases still have money left over. And who knows, you could play your cards right, grow your investment and someday be able to own an NBA team or maybe even a baseball team.
Even with the Powerball winnings, you should just forget about the NFL. Leave that to the professionally rich.
— Written by Justin Nails, who is part of the Athlon Contributor Network. Follow him on Twitter @justinnails.