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January 20, 2016

How the Rams’ Move to Los Angeles Affects Your Personal Seat License

A personal seat license, or PSL, is a paid license that allows the holder the right to buy season tickets for a specific seat in a stadium. In just about all circumstances, PSLs are put in place to pay for the building or remodeling of stadiums, without demanding extreme public funds. However, these licenses are bought on a team to team basis. Well what about PSLs for seats in a stadium without a team? Can you write those off as a loss? What if those PSLs are transferable to the future stadium in another city? Can those be sold for a capital gain?

A few years ago, these licenses were viewed as a good investment for both individuals and businesses. NFL fans and buyers of Steelers, Ravens and Bears PSLs saw their investment grow anywhere from 131% to 800%, according to Forbes. However, in recent years, the investments have been more risky, and the results have not been as favorable. Especially for an owner of a PSL in a stadium that no longer supports a professional team.

As most sports fans, and nearly all St. Louis residents now know, the owner of the Rams has decided to relocate the team to Los Angeles where they played from 1946-1994. *Moment of silence please*. Ironically, personal seat licenses made their first appearance in the NFL in 1995, when St. Louis used them to pay for the then-Trans World Dome and luring the Los Angeles Rams to the city, per TheStreet. While previous LA Rams fans are ecstatic, St. Louisans are grieving the loss of a professional sports team, and PSL holders are left scrambling for answers.

With the Rams being the first NFL team to move in the PSL era, many questions surround the move to LA. According to the former St. Louis Rams website, fans can “buy PSLs from a current season ticket holder and become the new season ticket holder for those exact seats for all future seasons.” When the Rams first came to St. Louis, their first games were played at Busch Stadium, not the Dome. Because PSLs were sold prior to playing in the Dome, this suggests the licenses are tied to the Rams, not the particular structure, per ThePostGame.

Many argue the owners of PSLs in St. Louis should be allowed to share in the success of the rising franchise value. Especially for businesses who considered the license an asset, will the investment be treated like a worthless stock by the IRS if they aren’t transferable? Assuming the PSLs are tied to the team and not the stadium, will they be considered a non-deductible personal loss? Can individual owners sell the license to the highest bidder in LA, or will the Rams organization buy them all back?

Consult with an Anders Tax Advisor regarding your Personal Seat License and how you can make the most of this unique situation.

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