Utah Jazz Ownership Restructured and Placed in Family Trust

[Cappy_Smurf]

I trust no one until Kicky's Vanderbilt *** speaks.

That said, I'm very hopeful based on the comments here that the money will have to be reinvested into the team which will mean we will go over the LT and do whatever it takes.

Hmmmm, I'm just worried that this deal may make them less likely to every pay the LT.

The Millers have already shown that they will pay the LT when the team is in a position to compete at a high level. They've paid it twice.

 

[Cappy_Smurf]

The downside of this is for all the fans who enjoy complaining about how cheap the Millers are will now have to shut their yap.

 

[Gameface]

I don't think [name redacted] has commented in this thread, and maybe I shouldn't out him, but he told me in person well over 6 months ago that this was going to happen. On very good authority. Essentially, no, exactly, from the source this information came from today.

 

[RJF]

The downside of this is for all the fans who enjoy complaining about how cheap the Millers are will now have to shut their yap.

How is this a downside? Haha!

 

[JAZZGASM]

The downside of this is for all the fans who enjoy complaining about how cheap the Millers are will now have to shut their yap.

Typically a legacy trust protects a family from estate tax and creditors. While an effect may be to keep the team in Utah, I would have to guess it was largely done to protect the family from taxes by allowing it to skip a generation, which would make it easier to keep the team in Utah beyond Greg's generation. I've done this for a few families. There are some amazing benefits. Instead of having a beneficiary buy a house, the trust buys it and the beneficiary lives in it. Creditors can't touch it, and it isn't available in divorce to the non-beneficary spouse as it is a trust asset(generally).

The family will continue to be the beneficiaries of the growing value of the Jazz organization, even though the profits are invested back into the team and/or trust. Without seeing the trust to confirm, I'd imagine this was the intent, similar to every other legacy trust I've worked on.

And a legacy trust does not mean the team cannot be sold or moved. Typically a legacy trust is designed to last for generations, but the corpus could be the team or other assets (such as cash for selling the team, which would be reinvested). Often the trustees have a duty to maximize the trust assets as well as a duty to diversify assets. This duties can be largely waived depending on the language of the trust.

Bottom line, doing this definitely does not increase the odds of the team moving, and likely mean it will be around, but the intent I am sure was not purely philanthropic.

 

[Jazz Spazz]

Typically a legacy trust protects a family from estate tax and creditors. While an effect may be to keep the team in Utah, I would have to guess it was largely done to protect the family from taxes by allowing it to skip a generation, which would make it easier to keep the team in Utah beyond Greg's generation. I've done this for a few families. There are some amazing benefits. Instead of having a beneficiary buy a house, the trust buys it and the beneficiary lives in it. Creditors can't touch it, and it isn't available in divorce to the non-beneficary spouse as it is a trust asset(generally).

The family will continue to be the beneficiaries of the growing value of the Jazz organization, even though the profits are invested back into the team and/or trust. Without seeing the trust to confirm, I'd imagine this was the intent, similar to every other legacy trust I've worked on.

And a legacy trust does not mean the team cannot be sold or moved. Typically a legacy trust is designed to last for generations, but the corpus could be the team or other assets (such as cash for selling the team, which would be reinvested). Often the trustees have a duty to maximize the trust assets as well as a duty to diversify assets. This duties can be largely waived depending on the language of the trust.

Bottom line, doing this definitely does not increase the odds of the team moving, and likely mean it will be around, but the intent I am sure was not purely philanthropic.

I would think the wording of the trust can be adjusted with stipulations that state the team cannot be moved.

I don't know if this is what happened, but it is something that is possible if desired, correct?

I just don't know if the trustee later can change anything they want to even if the original person starting the trust had something added in.

 

[JAZZGASM]

I would think the wording of the trust can be adjusted with stipulations that state the team cannot be moved.

I don't know if this is what happened, but it is something that is possible if desired, correct?

I just don't know if the trustee later can change anything they want to even if the original person starting the trust had something added in.

A change in ownership has to be approved by the NBA (just like any franchise). I really doubt the league would allow such a restriction, at least without a lot of stipulations that would give the NBA some control over decisions based on certain factors. And too be honest, I can't see many business owners doing that either, as it would greatly devalue the team when they want to sell it in the future.

 

[colton]

I heard some stipulation that the trust itself would make no profits from the team--all profits will go back into the Jazz organization. Anyone know of the details on that? That's got the potential to be huge, if accurate, essentially giving the Jazz a substantially larger operating budget than they would have otherwise. (Maybe 50%? I'm not sure what the appropriate number would be.)

 

[♪alt13]

I heard some stipulation that the trust itself would make no profits from the team--all profits will go back into the Jazz organization. Anyone know of the details on that? That's got the potential to be huge, if accurate, essentially giving the Jazz a substantially larger operating budget than they would have otherwise. (Maybe 50%? I'm not sure what the appropriate number would be.)

I imagine the board is going to be paid handsomely.

 

[Miggs]

The Millers have already shown that they will pay the LT when the team is in a position to compete at a high level. They've paid it twice.

Did I say we won't pay the LT?

 

[Miggs]

I imagine the board is going to be paid handsomely.

Yep. And executive salaries, specifically family members, who may have seen that money otherwise in the form of bonuses or what have you.

 

[Saint Cy of JFC]

I feel like a business board is less likely to go into the LT than an owner with 100% control.

 

[JAZZGASM]

I heard some stipulation that the trust itself would make no profits from the team--all profits will go back into the Jazz organization. Anyone know of the details on that? That's got the potential to be huge, if accurate, essentially giving the Jazz a substantially larger operating budget than they would have otherwise. (Maybe 50%? I'm not sure what the appropriate number would be.)

Not exactly correct. The profits will not be distributed to the beneficiaries-- i.e., all profits will remain with the trust investment(team) to grow the investment.

Eventually, the Miller family will get this money. The idea is that it will grow and avoid a huge tax bill.

 

[vegas]

[MENTION=870]JAZZGASM[/MENTION] could a trust be setup to have a championship be a priority? Could it be setup so that the Millers could not benefit financially from its sale as advertised?

I had always understood that thanksgiving point was a gift to the community after it's owner sold Wordperfect for $1 bill. Supposedly it was/is a philanthropic endeavor. Is there a reason this trust couldn't accomplish something similar?

 

[JAZZGASM]

[MENTION=870]JAZZGASM[/MENTION] could a trust be setup to have a championship be a priority? Could it be setup so that the Millers could not benefit financially from its sale as advertised?

I had always understood that thanksgiving point was a gift to the community after it's owner sold Wordperfect for $1 bill. Supposedly it was/is a philanthropic endeavor. Is there a reason this trust couldn't accomplish something similar?

You could have a charitable or charitable remainder trust. A legacy trust is designed to keep assets in a family...

 

[vegas]

You could have a charitable or charitable remainder trust. A legacy trust is designed to keep assets in a family...

Thanks and repped

 

[elan_prodigy]

I'm picturing this like that George Cloney movie, The Desendants...

I see it going 1 of 3 ways;

a) In future the franchise may be neglected as efforts and focus switch to enterprises generating profit

b) Money generated by franchise put towards HUGE salaries for family members

c) PEDAL TO THE METAL BABY!!! The Miller family going CHIP HUNTING!

 

[green]

This isn't a big deal. All it is is a way for the young Miller's to avoid a big tax bill when Gail dies.

Just the rich getting richer.

The way we fawn over stuff like this in Utah. Ha ha.

"Oh my god, the Miller's just saved themselves hundreds of millions of dollars, passing that cost into me! I LOVE them!"

 

[vegas]

Some outside info on this:

Second, what is a legacy trust?

A legacy trust, also known as a dynasty trust, is a form of generation skipping trust (GST). This type of trust is normally irrevocable and is intentionally formed to pass assets from the grantor to the grantor’s descendants beyond his/her immediate children (i.e. to grand children, great grandchildren, etc).

Finally, what do we know about the Utah Jazz legacy trust?

1. The trust has the potential to last hundreds of years. Dennis Haslam, who worked with the NBA in order to get the deal done, is quoted as having said, “This has the potential to last hundreds of years, maybe longer.”

In common law, there is what is known as a rule against perpetuities; this rule forbids instruments such as trusts “from tying up property for too long a time beyond the lives of people living at the time the instrument was written.”

Some states by statute have eliminated the rule against perpetuities and some have increased the length of time a trust can hold assets. In Utah, the law allows trusts to last 1,000 years. Assuming the Miller legacy trust utilizes Utah’s maximum time frame for trusts, the Jazz could be owned by the trust for 1,000 years.

This may be why Greg Miller said, "It is as close as possible to there being perpetual ownership of a professional sports team," son Greg Miller said.

2. The trust agreement provides for the profits to stay within the trust. Gail has stated the trust will not provide any "material benefit to the family from the Jazz." There have been some that have wondered how this is possible despite the obvious fact that Gail’s heirs are the beneficiary of the trust.

Again, we go to Dennis Haslam, “The profit stays within the trust. The profit that stays within the trust will be used as retained earnings, for expansion, for player salaries, or other operations. There could be a time period where the Jazz aren't profitable, so we'll stockpile cash. This trust will be well-supported financially, and will be able to survive into the future for generations and generations." From this statement, it appears that the trust agreement provides that the earnings of the Jazz are to be reinvested in the team, and since it is a provision of the trust, the trustee has to follow its directions in administering the trust.

https://www.slcdunk.com/research-statistics-analytics/2017/1/24/14365790/utah-jazz-larry-h-miller-group-of-companies-legacy-trust-tax-law

The Miller family obtained permission from the NBA to transfer ownership to a legacy fund that will be managed by Gail Miller acting as trustee. Following Gail, a six-member board of managers will assume the role of trustee. Those six members will be all be Miller family members, to be chosen in a process outlined in the trust's founding documents.

That board of managers would then vote on those team decisions that would normally go to ownership. For some votes, a majority would be required, for bigger decisions, a supermajority is required.

Miller said the Jazz are the first team the NBA has allowed to set up a legacy trust to keep a team. "To the best of my knowledge, this is unprecedented," said Dennis Haslam, who worked with the NBA in order to get the deal done. The negotiations and clarifications working with the league took over 12 months, according to Haslam.

https://www.ksl.com/?sid=42966429&nid=304&title=utah-jazz-vivint-arena-ownership-transferred-to-perpetual-legacy-trust

"It's part of a big package of estate planning," Gail Miller said of the trust. "But it's one part that's all done and it will last forever, as long as we have people who are willing and able to take care of it."

https://www.sltrib.com/home/4853754-155/utah-jazz-ownership-to-be-restructured

 

[green]

Ha ha. So, the trust will be lead by Miller family members? Another cash grab by the Millers. What a crock. This irks me big time.

Look, I'm ok with the Millers making money off the Jazz. They have every right to do so.

BUT, to sit there and lie to us about all of this...it's embarrassing and shows just how slimy this family is.

"look how great we are, all profits back into the Jazz, perpetual ownership, blah, blah, blah..."

Here is the reality:

By doing the trust, the Millers save hundreds of millions of tax dollars, passing that cost onto the middle class.

By having the board be all Miller family members, they can pay themselves a handsome salary, thereby profiting off the Jazz. Again, there is nothing wrong with all this, but to do this type of press conference, and pretend to do it for the state of Utah, and to put out all the profits bull ****...again, shows how slimy this family is.

Be honest. Set up the trust, and do it quietly, and go on with life. But to use this to somehow proclaim how wonderful you are...slimy.