Detroit Owners Ilitch, Ford Could Get Hit With 40% Federal Estate Tax Rate
CRAIN'S DETROIT BUSINESS' Bill Shea examines the ownership succession plans for the Lions, Tigers and Red Wings and notes the value of pro sports teams have "dramatically increased" over the past 30 years, fueling "federal estate tax bills that require complex succession planning by owners who wish their teams to stay in the family and shield their heirs from tax bills that could force them to sell." Because of their wealth, the estates of Tigers and Red Wings Owner Mike Illitch and Lions Owner William Clay Ford Sr. "would be subject to the top federal estate tax rate" of 40%. The law "allows for" a $5.25M exemption before the 40% rate kicks in. A source said that the 88-year-old Ford "intends to keep" the Lions in his family. He could leave the team to his wife, Martha Parke Firestone, which would "delay any estate taxes until her death." The Fords have three other children in addition to Lions Vice Chair William Clay Ford Jr., but it is "unknown if they own any stake in the Lions or would inherit any." Shea also notes there are questions about the Tigers and Red Wings, including whether the teams will "remain in the family, or will one or both be sold?" Also, are the heirs "interested in keeping the franchises" and can they "afford them?" Ilitch Holdings President & CEO Chris Ilitch is a "possible contender to assume ownership of the Tigers." One of seven Ilitch children, he has "been the face of the Ilitch organization since assuming his current role" in '04. A source said that the Ilitches are "committed to continuing ownership of both teams as part of their investments in Detroit." A suggestion that Mike Ilitch "intends at least for the Red Wings to remain family-owned lies in a major investment: the new downtown hockey arena" (CRAINS DETROIT BUSINESS, 11/24 issue).