Texas Tech Law Review Shell Document

369

IT’S A BRAND NEW BALLGAME: HOW TO

BEQUEST SEASON TICKETS FOR YOUR

FAVORITE SPORTS TEAM’S GAMES

“Gods do not answer letters.” – John Updike

I. INTRODUCTION .................................................................................. 369

II. TEAM POLICIES AND PROPERTY RIGHTS........................................... 373

A. Teams with Transfer Policies Already in Place .......................... 373

B. Is There a Property Right Established When Purchasing

Season Tickets? .......................................................................... 375

III. ESTATE TAXES AND TRANSFER FEES ................................................ 377

A. Estate Taxes and the Option to Purchase Season Tickets .......... 378

B. Sports Team Organizations’ Transfer Fees ................................ 379

IV. MR. EWING LOVES HIS TEAMS ......................................................... 381

A. The Dallas Cowboys ................................................................... 382

B. The University of Texas Longhorns ............................................ 382

C. The San Antonio Spurs ............................................................... 382

D. The Texas Rangers ..................................................................... 383

E. The Green Bay Packers .............................................................. 383

V. IT ISN’T THE ANSWER TO “WHO SHOT J.R.,” BUT IT HELPS ............. 384

A. Vested Property Interest ............................................................. 384

B. Each State’s Transfer Policy ...................................................... 385

C. Nationwide Universal Transfer Policy ....................................... 386

VI. CONCLUSION ..................................................................................... 387

I. INTRODUCTION

It all started with the Greek Olympic Games. According to written

records, the history of sporting events dates back to when the first Olympic

games were held in 776 B.C.

At that time, the sole event was the stade: an

approximately 210-yard run.

For nearly 1,200 years, the Olympic games

expanded, and athletes continually competed every four years.

However, in

393 C.E., Roman emperor Theodosius I abolished the Olympic games because

. See David Whitley, Teddy Ballgame Made Fenway Memories, ESPN.COM, http://espn.go.com/

sportscentury/features/00016638.html (last visited Mar. 10, 2012) (referencing John Updike’s article that

commemorates Ted Williams’s final game by showing how unwavering fans are despite the lack of returned

sentiment from the players).

. See Jennifer Rosenberg, History of the Olympics: Creating the Modern Olympics, ABOUT.COM,

http://history1900s.about.com/od/fadsfashion/a/olympicshistory.htm (last visited Mar. 10, 2012).

. See id.

. Id.

370 ESTATE PLANNING AND COMMUNITY PROPERTY LAW JOURNAL [Vol. 4:369

of their pagan influences.

Fortunately, Pierre de Coubertin helped revive the

Olympic games in 1896.

About the same time that the Olympic games were making their way into

the sports arena, football was beginning to develop in America.

In 1876,

members from Harvard, and various other universities in the United States, met

to formalize the rules for their new game, which they based somewhat on

rugby; they called the game “football.”

While these institutions and their

scholars were just beginning to develop football in the northeastern United

States, athletes had already been playing baseball in the United States for

almost a century.

Baseball, America’s pastime, “has given our people rest and

recreation, myths and memories, heroes, history and hope.”

Basketball, like

football and baseball, is another sport invented in the 19

century.

Dr. James

Naismath created basketball in Springfield, Massachusetts in 1891.

A century after their creation, these various sports evolved into a symbol

of American life. Most day-to-day conversations and water cooler talk revolve

around sports topics. As a result of this American obsession with sports

entertainment, more professional team organizations are capitalizing upon this

by marketing season tickets and seat licenses to fans as the business of the

sports industry expands.

Regardless of a fan’s reason for liking or disliking a

team, that allegiance will always be there, in life and in death. This is why

many fans with valuable season tickets to various sporting events want to be

able to pass on their interest to their friends and family members when they

pass.

Whether it is baseball, football, or basketball, sports in America are an

integral part of everyday life. Many people even identify themselves based on

their allegiance to various sports teams.

Baseball fans of the New York

Yankees automatically dislike Boston Red Sox fans and vice versa.

. Id.

. See ALLEN GUTTMAN, THE OLYMPICS: A HISTORY OF THE MODERN GAMES 17 (University of

Illinois Press, 2d ed. 1992); Rosenberg, supra note 2.

. See DIANA STAR HELMER & TOM OWENS, THE HISTORY OF FOOTBALL 6 (The Rosen Publishing

Group 2000).

. Id.

. See History of Baseball, ISPORT, http://baseball.isport.com/baseball-history/ (last visited Apr. 19,

2012); see also Pittsfield’s 1791 Baseball Bylaw, BERKSHIRE ATHENAEUM, http://www.pittsfieldlibrary.org/

baseball.html (last updated Aug. 2006).

. Id.

. See George Laughead, Jr., History of Basketball, KANSAS HERITAGE GROUP, http://www.kansas

heritage.org/people/naismith.html (last updated Jan. 5, 2005).

. See id.

. See generally Danette Davis, The Myth & Mystery of Personal Seat Licenses and Season Tickets:

Licenses or More?, 51 ST. LOUIS U. L.J. 241, 242 (2006).

. See Beth Dietz-Uhler & Jason R. Lanter, The Consequences of Sports Fan Identification,

MCFARLAND PUBLISHING, http://www.mcfarlandpub.com/excerpts/0-7864-3726-X.Chapter7.pdf (last visited

Mar. 10, 2012).

. See, e.g., Joseph Browne, New York Yankees’, Boston Red Sox’ Rivalry: Can’t We All Just Get

Along?, BLEACHER REPORT (Sept. 19, 2009), http://bleacherreport.com/articles/853583-yankees-red-sox-

rivalry-cant-we-all-just-get-along.

2012] HOW TO BEQUEST SEASON TICKETS 371

Unfortunately, violent crimes have even resulted from these rivalries.

Roughly 70% of the population identifies themselves with some sports team.

Some devoted fans have gone so far as vomiting out of anxiety before every

kickoff, skipping weddings for games, and even giving up their spot on

transplant lists to avoid missing a game.

Fans like this have been around

forever: “In the Iliad, Homer described spectators at a chariot race peering

through the dust and trying to see who was winning. Arguments ensued, bets

were made, and a fight almost erupted before Achilles told everyone to chill.”

Many teams, such as the New York Yankees, Boston Red Sox, New

England Patriots, Green Bay Packers, and the Duke University Blue Devils,

have decade-long waiting lists and can have anywhere from 30,000–60,000

people waiting for a chance to purchase these highly coveted season tickets.

Regardless of the economic climate looming outside the gates, Americans

have always spent countless dollars on sporting events and the activities and

. See, e.g., 31-year-old arrested for beating S.F. Giants fan, CBS NEWS (May 22, 2011),

http://www.cbsnews.com/stories/2011/05/22/sportsline/main20065161.shtml (demonstrating fan violence

when a rival Los Angeles Dodgers fans beat a San Francisco Giants fan into a coma after the Giants opening

game against the Dodgers).

. See Beth Gillin, Fantastic v. fanatical The devoted. The Johnny-come-latelies. And, ahem, the other

extreme. PHILLY.COM (Jan. 30, 2005), http://articles.philly.com/2005-01-30/news/25435854_1_christian-end-

fan-behavior-sport-fans.

. Id.

. See James Reese et. al., National Football League Ticket Transfer Policies: Legal and Policy

Issues, 14 J. LEGAL ASPECTS SPORTS 163, 166 (2004). Below is a table of the estimated waitlist for all of the

teams in the NFL and some MLB teams:

Team

Estimated Waitlist

Washington Redskins

135,000

Chicago Cubs

100,000

Green Bay Packers

57,000

Tampa Bay Buccaneers

45,000

New England Patriots

35,000

Tennessee Titans

30,000

Denver Broncos

20,000

New York Giants

20,000

Pittsburgh Steelers

18,000

New York Jets

15,000

Chicago Bears

14,000

Philadelphia Eagles

8,000

Boston Red Sox

7,000

Kansas City Chiefs

4,000

Minnesota Vikings

2,000

Cleveland Browns

1,800

Houston Texans

1,500

Detroit Lions

1,200

Atlanta Hawks

900

Miami Dolphins

200

San Francisco 49ers

N/A; 1–3 years

Remaining NFL Teams

372 ESTATE PLANNING AND COMMUNITY PROPERTY LAW JOURNAL [Vol. 4:369

costs that come with them.

Fans will wait day and night for tickets to some of

sport’s most coveted events like the Super Bowl and NCAA March Madness.

Some fans, however, will wait a lifetime or more for coveted season tickets to

America’s most elite teams’ games. Many sports teams, such as the Green Bay

Packers, have their own guidelines and forms for passing on season tickets at

death.

These forms are usually available through the organization and are

meant to help settle most disputes that could potentially arise, but many

disputes do arise if the decedent dies intestate.

This comment explains how individuals can pass on the right to purchase

coveted season tickets in their will, if there is a fee associated with the transfer,

and if there is a tax or transfer fee associated with the transfer. It will also

propose a solution to the varying transfer policies among the sports

organizations.

Part I of this comment introduced the history of sporting events and the

integral part those events play in everyday American lives.

Part II discusses

various teams that already have forms that provide current season ticket owners

with the opportunity to transfer tickets and if there is a property interest created

by owning season tickets.

Part III discusses if there are any transfer fees and

if Congress may tax the transfer or purchase of tickets as an inheritance tax or

part of the estate tax.

Part IV uses a hypothetical situation of a man who has

season tickets to multiple teams’ events, and it discusses the difficulties the

season ticket holder, lawyers, and courts may face because of the varying team

policies.

Finally, Part V proposes a solution to the problem with varying

transfer policies by implementing a uniform transfer policy among all sports

organizations.

This can be achieved either by Congress passing a statute that

applies to all organizations, each individual state’s congress adopting a statute

that applies to the teams within that state, or creating a vested property right

with the season ticket holder when he or she purchases the tickets.

. See, e.g., Want To Go To Super Bowl? It’ll Cost You!, WTAE PITTSBURGH, http://www.wtae.

com/r/26591500/detail.html (last updated Jan. 24, 2011). In 2011, when the United States was still in the

midst of a recession, fans were spending anywhere from $9,000 to $38,000 for two tickets to the game, two

airline tickets, and two nights stay in a hotel near the 2011 Super Bowl Game between the Pittsburgh Steelers

and Green Bay Packers. See id.

. See, e.g., Sara Foley, Ticket window No. 'ate': Student puts Cotton Bowl ticket waiting list in mouth

to secure place in line, THE BATTALION ONLINE (Dec. 10, 2004) http://www.thebatt.com/2.8485/ticket-

window-no-ate-1.1202447. After camping out for days, a student ate a piece of paper that other students

placed their names on to secure a spot in line to purchase tickets for Texas A&M’s game against The

University of Tennessee Volunteers at the Cotton Bowl. See id.

. See, e.g., Green Bay Packers Season Ticket Transfer Form, PACKERS, http://prod.static.packers.

clubs.nfl.com/assets/docs/season_ticket_transfer.pdf (last visited Mar. 10, 2012) [hereinafter Green Bay

Transfer Form].

. See supra pp. 369–72.

. See infra Part II.

. See infra Part III.

. See infra Part IV.

. See infra Part V.

2012] HOW TO BEQUEST SEASON TICKETS 373

II. TEAM POLICIES AND PROPERTY RIGHTS

Many teams have already adopted policies for transferring season tickets.

The policies of the organizations that already have transfer policies in place are

usually available on teams’ websites or through teams’ ticket offices.

Also,

some organizations have vested property rights in season ticket holders by

selling personal seat licenses to fund building new stadiums.

Either the

season ticket or the organization’s website has a clause that grants season ticket

holders a personal seat license.

Courts have held this personal seat license to

vest a property right in the season ticket holder.

A. Teams with Transfer Policies Already in Place

“An open NFL season ticket transfer is executed when a season ticket

holder of record transfers the name on their ticket account to a third party.

Typically, this process occurs in the off-season when season-ticket renewals

take place.”

As a result of the confusing nature of transfers and the possibility

of significant monetary gains by transfers, many teams have limited the

transferability of season tickets.

Some teams, such as the New England

Patriots, only allow season ticket holders to transfer tickets to a family member

in the event of death.

This policy shows that many teams are recognizing the

difficulties inherent in trying to manage the ownership rights of a season ticket

holder who has passed away, and determining who is eventually entitled to the

tickets posthumously.

Many other teams are starting to recognize this difficulty as well, such as

the Green Bay Packers.

The following is the Green Bay Packers

Organization’s official policy on ticket transfer at death:

a) Upon death of ticket holder

1) To surviving spouse; or if no spouse, the surviving children of

a deceased ticket holder without authorization. (If children do not

agree - no transfer.)

. Green Bay Transfer Form, supra note 23.

. Id.

. Davis, supra note 13.

. Id.

. Reese et. al., supra note 20, at 165.

. Id. at 164 (chart noting that the Arizona Cardinals, Chicago Bears, Detroit Lions, Indianapolis Colts,

Jacksonville Jaguars, Kansas City Chiefs, New Orleans Saints, New York Jets, Philadelphia Eagles, San

Francisco 49ers, and Seattle Seahawks have open transfers without limitations; whereas the Atlanta Hawks,

Denver Broncos, Green Bay Packers, Houston Texans, Minnesota Vikings, New York Giants, and Tampa Bay

Buccaneers only allow transfers to immediate family).

. Id.

. Green Bay Transfer Form, supra note 23.

374 ESTATE PLANNING AND COMMUNITY PROPERTY LAW JOURNAL [Vol. 4:369

2) If direction by deceased under will or specific writing to family

devisees defined in (b) but not to devisees who are not defined in

(b), even with direction.

b) To family, defined as, spouse and ‘blood’ relatives who are not

more than first cousins, on direction of ticket holder in writing during

his or her life-time. (Excludes, for example, transfer to friends.)

Green Bay’s policy of transferring the tickets to the decedent’s children

requires that the children agree on the transfer; if there is not an agreement, the

organization will not transfer the tickets.

The Green Bay Packers have one of

the more detailed explanations of the different NFL organizations’ transfer

policies.

Green Bay’s policy is probably so detailed because the Packers have

one of the largest waiting lists of all sports organizations.

The Green Bay

Packers are unlike many other organizations such as the Boston Red Sox,

Dallas Cowboys, Oakland Raiders, Pittsburgh Steelers, and San Diego

Chargers, who refuse to allow the transfer of season tickets.

The St. Louis

Cardinals have created a marketplace in which current season ticket holders can

transfer season tickets; however, the Cardinals do not have a specific policy in

place for when a season ticket holder dies and wants to transfer the tickets.

Duke University basketball tickets are usually nontransferable upon death,

but for a $50,000 fee and an annual contribution of $6,000, one man, John

Dorton, made it possible.

Duke’s policy, similar to Green Bay’s, is to first

transfer the tickets to family members when a season ticket holder dies.

However, Duke’s policy does not require the agreement between siblings like

the Green Bay Packer's policy, and as a result, Dorton’s daughter, who did not

receive the tickets, filed a lawsuit, which has not yet been adjudicated.

The

University of Texas only allows two kinds of transfers: students can transfer

. Official Policy on Transfer of Packers Season Tickets, PACKERS, http://www.packers.com/tickets/

season-tickets.html (last visited Mar. 10, 2012).

. Id.

. Compare Green Bay Packers Season Ticket Transfer Form, PACKERS, http://prod.static.packers.

clubs.nfl.com/assets/docs/season_ticket_transfer.pdf (last visited Mar. 10, 2012), with St. Louis Rams PSL

Transfer Form, ST. LOUIS RAMS, http://www.stlouisrams.com/assets/docs/PSL_Transfer_Form_2_2_11.pdf

(last visited Mar. 10, 2012).

. See Frequently Asked Questions, PACKERS, http://www.packers.com/fan-zone/faq.html (last visited

Mar. 10, 2012) (showing that the Green Bay Packers have approximately 81,000 people on a waitlist for

season tickets; this is approximately a 30-year wait).

. Reese et. al., supra note 20, at 164.

. See, e.g., Ballpark Founders Marketplace, CARDINALS, http://stlcardinals.seasonticketrights.com/

Ballpark-Founders-Seats/Sellers.aspx (last visited Mar. 10, 2012).

. See Simon Brown, Fire Lawsuit Over Duke Basketball Tickets, SPORTS HR (July 18, 2011),

http://sportshrdept.blogspot.com/2011/07/fire-lawsuit-over-duke-basketball.html. See also Aaron Beard,

Duke Basketball Tickets Lawsuit: Katina Dorton Sues Sister Over Season Tickets, HUFFINGTON POST (July

15, 2011), http://www.huffingtonpost.com/2011/07/15/duke-basketball-tickets-lawsuit-katina-dorton_n_

900091.html.

. Beard, supra note 44.

. Id.

2012] HOW TO BEQUEST SEASON TICKETS 375

their season tickets to fellow classmates and patrons can transfer ticket accounts

to a surviving spouse.

These discrepancies among sports organizations have

lead to confusion, undue hassles, and unnecessary litigation when trying to

bequest season tickets in one’s will.

For these sports organizations, a uniform

season ticket transfer policy upon death would aid lawyers and current ticket

holders to bequest season tickets.

B. Is There a Property Right Established When Purchasing Season Tickets?

“On the most basic level, the purchase of a season ticket package entitles

one to a specified seat for all home games played by a respective franchise at

their home stadium.”

Traditionally, the sports organization that sold the

respective tickets and seat licenses classified them together as a “license.”

“However, careful analysis reveals that holders of personal seat licenses and

season tickets have greater interests in these properties than a traditional

licensee.”

According to the Carolina Panthers Media Guide, the Carolina

Panthers were the first team to create a permanent seat license, which gives the

current ticket holder the right to continually purchase that seat.

Thus, the

license grants a vested property right to the ticket holder.

The purchase of a personal seat license (PSL), in addition to the season

tickets, often gives the purchaser the right to transfer the PSL.

Usually, a

personal seat license comes at a much higher cost than a regular license, but it

comes with a much greater interest as well.

A personal seat license gives the

owner the exclusive right to purchase season tickets for that exact same seat or

set of seats every season; the exclusive right to purchase playoff tickets; the

ability to purchase parking passes; the exclusive right to tickets to other events

held at that team’s venue; and financing for the high additional costs.

regular license, obtained when just purchasing a season ticket, is a restricted

interest in an object or land.

The difference between the two is that “a classic

license is personal to the licensee, and thus, nontransferable and terminable

. Season Tickets, LONGHORN SPORTS, http://www.texassports.com/tickets/m-footbl-ticket-info.html

#transferring (last visited Mar. 10, 2012).

. See supra notes 34–47 and accompanying text.

. See, e.g., Mark Levengood, Unregistered Securities in the National Football League: Can the

Securities Act of 1933 Protect Season Ticket Holders and Personal Seat License Holders?, 11 VILL. SPORTS

& ENT. L.J. 411, 414 (2004).

. Davis, supra note 13.

. Id.

. CAROLINA PANTHERS MEDIA GUIDE (Electric City Printing 1998).

. See Davis, supra note 13; In re Liebman, 208 B.R. 38, 41 (Bankr. N.D. Ill. 1997); In re I.D. Craig

Serv. Corp., 138 B.R. 490, 502 (Bankr. W.D. Pa. 1992).

. Davis, supra note 13, at 258.

. Id. at 242.

. Dallas Cowboys PSL, PSL SOURCE, http://www.pslsource.com/dallas_cowboys_psl#When_can_

Cowboys_PSLs_be_transferred? (last visited Mar. 10, 2012).

. Davis, supra note 13.

376 ESTATE PLANNING AND COMMUNITY PROPERTY LAW JOURNAL [Vol. 4:369

upon the licensee’s death.”

This creates further confusion for those

individuals hoping to transfer their season tickets in their will. If the season

ticket is just a classic license and terminable upon the licensee’s death, then that

might be the end of the road for the heirs. However, employing a uniform

sports-wide transfer policy would clear up this confusion among sports fans.

Earlier bankruptcy cases found that a property interest did not exist when

purchasing season tickets.

In In re Liebman, the court found “that a Bulls'

season ticket holder [had] nothing more than a license to purchase tickets,

which the Bulls [could] revoke at any time.”

The trustee in this case placed a

substantial amount of weight on the team’s practice of renewing season tickets

automatically as long as the account was current.

The court reasoned,

however, that “[t]he expectation that the tickets would be renewed, however

realistic, does not ripen into a property interest.”

The court reviewed the

written policy pertaining to the transfer of season tickets, which provided,

“NEW CONTRACTS ARE NOT TAKEN FOR PERSONAL ACCOUNTS.

WE DO NOT CHANGE NAMES, ADD NAMES, NOR DO WE TAKE

‘CARE OF’ NAMES AND ADDRESSES. SEASON TICKETS ARE NOT

TRANSFERABLE AND THEY ARE A REVOKABLE (sic) LICENSE.

SEASON TICKETS ARE OFFERED ON A ONE-YEAR BASIS ONLY.

(Emphasis in original).”

After reviewing the season ticket transfer policy, the

court ultimately concluded that there was no property interest based on the

“right to renew.”

However, many courts now find a property interest in season tickets.

In re I.D. Craig Service Corp., the United States Bankruptcy Court for the

Western District of Pennsylvania found a property interest existed in the

renewal rights of a season ticket holder.

The court argued that because the

seller’s annual handbook referred to the season ticket holder as the "owner"

twice in the handbook and even contained a section entitled “Season Ticket

Ownership,” this created a property interest in owning the season tickets.

Additionally, the court concluded that “the ticket seller’s policies and practices

regarding season tickets created an expectancy interest in the renewal rights of

season ticket holders . . . [a]s a result, the season ticket holder reasonably

expected that the right to renew season tickets would continue indefinitely.”

. Id. at 245.

. In re Liebman, 208 B.R. 38, 39 (Bankr. N.D. Ill. 1997).

. Id. at 41.

. Id.

. Id. at 40 (quoting the Chicago Bulls’ transfer policy).

. Id. at 41.

. See, e.g., In re I.D. Craig Serv. Corp., 138 B.R. 490, 502 (Bankr. W.D. Pa. 1992); In re Platt, 292

B.R. 12, 17 (Bankr. D. Mass. 2003).

. See In re I.D. Craig Serv. Corp., 138 B.R. at 502.

. Id. at 498. See also Davis, supra note 13, at 249–50.

. Davis, supra note 13, at 250.

2012] HOW TO BEQUEST SEASON TICKETS 377

The court concluded that there was “a property interest in the season ticket

holder’s right to renew the season tickets.”

In the more recent case, In re Platt, the United States Bankruptcy Court in

Massachusetts considered the ownership interest of Boston Red Sox season

tickets.

The court agreed with the trustee in the case that past practices by the

Red Sox, which allowed parties to transfer season tickets, had created a

reasonable expectation of a property interest.

The court ultimately held “that

the practice of automatically renewing season tickets and arbitrarily allowing

the transfer of tickets created a property interest in the season ticket holder.”

Many teams are structuring the season ticket contract as a license, but as these

cases demonstrate, the courts are following the legal trend of establishing

property rights for the season ticket holders.

If, as many of these courts have demonstrated, there is a property interest

vested in the season ticket holder by purchasing these season tickets, does that

“property” automatically transfer in the decedent’s estate upon death? If so,

how does that affect the estate tax levied against the estate? If it does not, and

the decedent filled out a transfer form before death, can the organization

through which the decedent held season tickets impose a transfer fee upon

transferring the tickets?

III. ESTATE TAXES AND TRANSFER FEES

Chapter 11 of the Internal Revenue Code (I.R.C.) specifies what is taxed

when a decedent passes his or her estate upon death.

Section 2101 of the

I.R.C. establishes the imposition and rate of tax; it states:

(a) Imposition

. . . [a] tax is hereby imposed on the transfer of the taxable

estate of every decedent who is a citizen or resident of the

United States.

(b) Computation of tax

The tax imposed by this section shall be the amount equal to the

excess (if any) of -

(1) a tentative tax computed under subsection (c) on the

sum of –

(A) the amount of the taxable estate,

(B) the amount of the adjusted taxable gifts, over

. Id.

. In re Platt, 292 B.R. at 17.

. Id. at 14.

. Davis, supra note 13, at 251.

. Id.

. 26 U.S.C. § 2101 (2006).

378 ESTATE PLANNING AND COMMUNITY PROPERTY LAW JOURNAL [Vol. 4:369

(2) the aggregate amount of tax which would have been

payable under chapter 12 with respect to gifts made by the

decedent after December 31, 1976, if the modifications

described in subsection (g) had been applicable at the time

of such gifts.

Is the amount of the season ticket included in the amount of the taxable

estate? If so, how is the amount calculated? Is the amount calculated at face

value or at what the season ticket owner first paid for the tickets?

If the tickets are not passed through the decedent’s will and instead are

passed through a transfer form provided by the team and filled out before

decedent’s death, can the team impose a transfer fee? If the team can, should

Congress treat this transfer fee similar to an inheritance tax levied against the

heir by the sports team organization?

A. Estate Taxes and the Option to Purchase Season Tickets

According to Michael Hatfield, a tax professor at the Texas Tech

University School of Law, an option to buy the season tickets would essentially

be similar to an option to buy stocks that have been left in one’s will.

When

you “receive an option to buy stock, you may have income when you receive

the option, when you exercise the option, or when you dispose of the option.”

The same rules would apply when an heir receives an option to buy the season

tickets.

Section 2703 of the I.R.C. deals with special valuation rules and

addresses how to value an option.

The code states that “the value of any

property shall be determined without regard to—(1) any option, agreement, or

other right to acquire or use the property at a price less than the fair market

value of the property.”

However, § 2705 of the I.R.C. only applies if the issue

purchases the season ticket at the rate at which the previous season ticket holder

purchased the tickets, almost like a rent-control type situation.

To avoid this conflict, many estate plans contain a clause that allows the

issues to sell the tickets and split the proceeds from the sale.

However, this

does not help attorneys in determining the estate tax levied against the estate

when an issue decides to exercise the option and purchase the season tickets.

. Id.

. Interview with Michael Hatfield, Professor of Law, Tex. Tech Univ. Sch. of Law, in Lubbock, Tex.

(Oct. 25, 2011).

. Topic 427- Stock Options, INTERNAL REVENUE SERVICE, http://www.irs.gov/taxtopics/tc427.html

(last updated Dec. 22, 2011).

. Interview with Michael Hatfield, supra note 76.

. 26 U.S.C. § 2703 (2006).

. Id. at (a)(1).

. See, e.g., Cheryl K. David, Example of How an Estate Plan Can Contain Very Specific Clauses for

Heirs, as in Green Bay Packers Tickets!, LAW OFFICES OF CHERYL DAVID (Aug. 22, 2011), http://www.

cheryldavid.com/blog/2011/08/estate-plan-specific-clauses-heirs-green-bay-packers-tickets/.

2012] HOW TO BEQUEST SEASON TICKETS 379

The estate tax is a tax on the right to transfer property at death.

The

estate tax “consists of an accounting of everything [the decedent] own[s] or

ha[s] certain interests in at the date of death. The fair market value of these

items is used, not necessarily what [was] paid for them or what their values

were when [the decedent] acquired them.”

Therefore, the testator calculates

the present fair market value of the season tickets at the time of the decedent’s

death and includes that amount in the value of the estate.

Generally, most

estates do not have to pay an estate tax.

However, “[a] filing is required for

estates with combined gross assets and prior taxable gifts exceeding $1,500,000

in 2004 - 2005; $2,000,000 in 2006 - 2008; $3,500,000 for decedents dying in

2009; and $5,000,000 or more for decedent's dying in 2010 or later.”

As a

result of this high dollar value, most heirs inheriting season tickets would not

have to worry about the IRS levying an estate tax against the estate; however, in

certain cases where the decedent owned several sets of season tickets in

desirable locations, there is a greater risk of an estate tax.

B. Sports Team Organizations’ Transfer Fees

As a result of many team organizations implementing their own guidelines

for passing on season tickets upon death, many of them have also started to

include transfer fees as well.

In 2005, the New England Patriots implemented

a new “Pass It On” transfer program that imposed a $2,000 to $5,000 transfer

fee per ticket transferred.

Under this new transfer program, the Patriots only

allow 1,000 season ticket transfers per year.

The Patriots organization

implemented this new program because it previously did not allow transferring

of season tickets at all.

In accordance with the Pass It On transfer program,

“[t]he cost per transfer for each ticket [was] $5,000 for lower-level sideline

seats, $3,500 for lower-level end zone and all second-level seats, and $2,000

. See Estate Tax, INTERNAL REVENUE SERVICE, http://www.irs.gov/businesses/small/article/0,,id=

164871,00.html (last updated Feb. 1, 2012).

. See Frequently Asked Questions on Estate Taxes, INTERNAL REVENUE SERVICE, http://www.irs.gov/

businesses/small/article/0,,id=108143,00.html (last visited Mar. 10, 2012).

. Estate Tax, supra note 82.

. Id.

. See, e.g., Andy Nelesen, Brother Sues Brother Over Packers Tickets, HANDEL ON THE LAW (May

28, 2009), http://www.handleonthelaw.com/home/news_details.aspx?News=6943. Decedent, Walter

Christman, left thirteen season tickets in trust to his sons who sold the tickets for $300 per game per ticket

(approximately $62,400 total). Id. Gain from the sale of the tickets alone would be applicable to the estate.

See id.

. See Bruce Mohl, Season ticket transfer fees irk fans: Patriots relax rule, but move could cost up to

$5,000 per seat, THE BOSTON GLOBE (Feb. 25, 2005), http://www.boston.com/business/articles/2005/02/25/

season_ticket_transfer_fees_irk_fans/.

. Id.

380 ESTATE PLANNING AND COMMUNITY PROPERTY LAW JOURNAL [Vol. 4:369

for all upper-level seats.”

The transfer fee is unique to the Patriots in that they

are the only team in the National Football League to impose a transfer fee at the

time.

Many fans expressed their outrage at the high cost of the transfer; one

fan even went so far as to call it a “seat tax.”

As a result of the outcry over the

high costs in transfer fees, the Patriots revoked their transfer fee and no longer

charges upwards of $5,000 to transfer tickets that are only valued at $1,000-

$2,000.

Under the new Pass It On transfer program, season ticket holders can

transfer their tickets, for free, only to immediate family members.

Additionally, only accounts held for a decade or longer are eligible.

After the Patriots abolished its transfer fee under the Pass It On program, the

Denver Broncos remained the only team with a transfer fee.

Although the

Broncos impose a transfer fee, it is nowhere near the amount the Patriots were

originally charging.

The Broncos only charge a $100 fee to transfer season

tickets.

100

Although not a set fee, the University of Nebraska requires a

donation for the transfer of season tickets regardless of whether the original

ticket owner made a donation towards the university or not.

101

The New York

Mets require a $4 transaction fee for the transfer of tickets.

102

Either the

transferor or the transferee can pay this fee.

103

Pennsylvania State University

(Penn State) has a transfer fee similar to the one the New England Patriots

originally had in place.

104

Penn State allows donors to transfer six season

tickets to a new account holder.

105

The transfer fee accompanying these

transfers ranges from $500 to $2,000 depending on the ticket seat location.

106

As evidenced by the multitude of organizations that implement transfer

fees, the transfer fees are allowed; however, fan outrage might lead teams to

eliminate these fees, making it easier for decedents to pass on the tickets in their

. Id.

. See Pass It On Program, PATRIOTS, http://www.patriots.com/tickets/season-tickets-amenities.

html#tix (last visited Mar. 10, 2012). See also Mohl, supra note 88.

. See Pass It On Program, supra note 95.

. Id.

. See id. See also Mohl, supra note 88.

. Compare Pass It On Program, supra note 95 with 2011 Transfer Check List, DENVER BRONCOS,

http://www.denverbroncos.com/tickets-and-stadium/season-tickets/season-ticket-transfer.html (last visited

Mar. 10, 2012).

100

. 2011 Transfer Check List, supra note 99.

101

. 2011 Nebraska Football Ticket Information, HUSKERS, http://www.huskers.com/ViewArticle.

dbml?DB_OEM_ID=100&ATCLID=1210822 (last visited Mar. 10, 2012).

102

. Mets Ticket Transfer, NEW YORK METS, http://newyork.mets.mlb.com/nym/ticketing/ticket_

transfer.jsp (last visited Mar. 10, 2012).

103

. Id.

104

. Compare Football Season Ticket & Parking Transfer Guidelines, GO PSU SPORTS, http://www.

gopsusports.com/sports/c-lionclub/step-transfer-policy.html (last visited Mar. 10, 2012) with Mohl, supra note

88.

105

. Football Season Ticket & Parking Transfer Guidelines, supra note 104.

106

. Id.

2012] HOW TO BEQUEST SEASON TICKETS 381

wills.

107

Even with the majority of transfer fees being low cost, decedents have

the choice of transferring the season tickets through the team policies or their

will without much cost to their heirs. For example, a pair of two season tickets

to the Denver Broncos costs a maximum of $2,220.

108

Leaving these season

tickets in one’s will would unlikely trigger an estate tax, and transferring these

tickets, instead of leaving them in the will, would only cost $200.

109

Either

method would be of little cost to the decedent, his or her estate, or the recipient

of the ticket(s). Consequently, there is no reason why decedents could not, and

should not, transfer the season tickets to a family member or friend of their

choice.

IV. MR. EWING LOVES HIS TEAMS

Confusion and problems are not as anticipated or commonplace when the

ticket holder only holds season tickets to one organization; however, when a

ticket holder owns season tickets to multiple organizations with differing

transfer policies, confusion arises. While many teams have very similar

policies for transferring tickets,

110

there would be a lot less confusion if either

all the organizations implemented the same policy, either by Congressional

statute or of their own will, or the courts and Congress automatically

established the season tickets as a piece of property that become a part of the

estate at the time of the ticket holder’s death.

Imagine Mr. John Ross Ewing, an amoral oil baron from Dallas, Texas,

who had a Texas-size passion for his sports teams. Mr. Ewing has season

tickets to many different organizations’ games. He has season tickets to the

notorious Dallas Cowboys, the University of Texas Longhorns, the San

Antonio Spurs, the Texas Rangers, and naturally the Green Bay Packers,

considering they are America’s team.

111

If J. R. Ewing is one thing, he’s a

proud American.

Each of Mr. Ewing’s favorite teams has a different transfer policy.

112

Mr.

Ewing wants to be certain that upon his death, his sons James Richard

Beaumont, John Ross Ewing III, and Terrance Harper, as well as his grandson

Jimmy Beaumont, will inherit his tickets. Unfortunately, Mr. Ewing is too busy

107

. See, e.g., Pass It On Program, supra note 95. See also Mohl, supra note 88; 2011 Transfer Check

List, supra note 99; Mets Ticket Transfer, supra note 102; Football Season Ticket & Parking Transfer

Guidelines, supra note 104 [hereinafter Team Policy Comparisons].

108

. See Season Tickets, DENVER BRONCOS, http://www.denverbroncos.com/tickets-and-stadium/

season-tickets.html (last visited Oct. 27, 2011).

109

. See Estate Tax, supra note 82. See also 2011 Transfer Check List, supra note 99.

110

. See Team Policy Comparisons, supra note 107.

111

. Tim MacMahon, A new America: Poll picks Packers, ESPN DALLAS/FORT WORTH, http://espn.go.

com/dallas/nfl/story/_/id/7377467/dallas-cowboys-second-green-bay-packers-america-team-poll-landslide (last

visited Mar. 10, 2012).

112

. See infra Part IV.A–E.

382 ESTATE PLANNING AND COMMUNITY PROPERTY LAW JOURNAL [Vol. 4:369

running the Ewing Oil Company and does not have time to worry about all the

differences between the teams’ transfer policies.

A. The Dallas Cowboys

The Dallas Cowboys are one of the many organizations that offer the

option to purchase a PSL when purchasing season tickets.

113

Under their PSL

policy, a season ticket holder is able to transfer the PSL; however, it does not

state if the season ticket holder is also allowed to transfer the season ticket as

well.

114

A season ticket holder who did not purchase the PSL does not have the

option to transfer the season tickets at all.

115

Unfortunately for Mr. Ewing and

his sons, he did not purchase the PSL option, so his season tickets are non-

transferrable at the time of death.

B. The University of Texas Longhorns

Mr. Ewing also has season tickets to his favorite college football team, the

University of Texas Longhorns. The University of Texas provides two avenues

for ticket holders to transfer or sell tickets to sporting events.

116

The

marketplace is a place for ticket holders to sell individual football and

basketball tickets for games they are unable to attend.

117

Ticket transferring

works a little differently: season ticket holders are unable to transfer individual

tickets for a particular football game, or transfer season tickets at all unless to a

surviving spouse.

118

Here is another instance where Mr. Ewing is unable to

pass on his tickets, something he purchased, to his family.

C. The San Antonio Spurs

The San Antonio Spurs do not have the option of a PSL like the Dallas

Cowboys; however, the organization does have a similar option called “Charter

Seat Membership.”

119

The Charter Seat Membership gives the purchaser the

same rights that a PSL holder receives.

120

Funds from The Charter Seat

Membership helped build the Spurs’ new AT&T Center and require members

to pay a one-time charge, dependent upon seat location, which ranges between

113

. Dallas Cowboys PSL, supra note 56.

114

. Id.

115

. Id.

116

. Ticket Marketplace and StubHub, TEXAS SPORTS, http://www.texassports.com/sports/lfoundation/

spec-rel/benefits-chart.html#marketplace (last visited Mar. 10, 2012).

117

. Id.

118

. Id.

119

. AT&T Center FAQs, NBA, http://www.nba.com/spurs/news/att_faq_010702.html#3-3 (last visited

Mar. 10, 2012).

120

. Id.

2012] HOW TO BEQUEST SEASON TICKETS 383

$4,000 and $7,500 per seat.

121

Like the Dallas Cowboys, the San Antonio

Spurs only allow the transferring of season tickets when purchased in

conjunction with a PSL or Charter Seat Membership.

122

Fortunately for Mr.

Ewing, he decided to make the wise investment and purchase the Charter Seat

Membership along with his San Antonio Spurs season tickets, so he is able to

transfer his season tickets to his sons at death, or any other time.

D. The Texas Rangers

The Texas Rangers followed a similar scheme to the PSL and Charter Seat

Membership that the Dallas Cowboys and San Antonio Spurs implement.

123

The Texas Rangers funded the building of the Rangers Ballpark in Arlington

through bonded seats.

124

The Texas Rangers organization wanted to keep the

upgrade process fair, so “season ticket purchasing privileges are non-

transferable.”

125

However, if an “option holder wishes to sell or transfer their

seat to another individual or company, a transfer fee equal to 20% of each seat

option being sold is required.”

126

Again, Mr. Ewing did not purchase a bond to

help build Rangers Ballpark, so therefore he is unable to transfer his season

tickets to his sons.

E. The Green Bay Packers

Considering it is “America’s team,” the Green Bay Packers have one of

the most thorough and extensive transfer policies of all sports organizations in

the United States.

127

Under the current policy the Packers have in place, the

season ticket holder may permanently relinquish any and all privileges as a

ticket holder by filling out a form that transfers the season tickets at the present

time or upon death.

128

Additionally, the Packers organization allows for an executor of the estate

to transfer the season tickets to a relative in the event that the season ticket

holder died without previously filling out the form to transfer the tickets upon

death.

129

This provides a comprehensive way to almost certainly guarantee that

the season tickets will be passed down upon the death of the season ticket

holder. The only time this poses a problem is when the season ticket holder

121

. Id.

122

. See id. See also Dallas Cowboys PSL, supra note 56.

123

. See Season Ticket Holder Handbook, TEXAS RANGERS, http://texas.rangers.mlb.com/tex/ticketing

/sth_handbook.jsp (last visited Mar. 10, 2012); AT&T Center FAQs, supra note 119; Dallas Cowboys PSL,

supra note 56.

124

. See Season Ticket Holder Handbook, supra note 123.

125

. Id.

126

. Id.

127

. See Green Bay Transfer Form, supra note 23.

128

. Id.

129

. Id.

384 ESTATE PLANNING AND COMMUNITY PROPERTY LAW JOURNAL [Vol. 4:369

wished to bequest the tickets to a friend and not a family member.

130

However,

this is not a problem for the Ewing family, because Mr. Ewing hopes his sons

will receive his season tickets.

Of the five teams that Mr. Ewing holds season tickets to, only two of them

allow for him to pass down his season tickets to his sons. If he had not

purchased a bond and his sons do not pay the 20% transfer fee, they would only

inherit the season tickets from the Green Bay Packers. This is illustrative of

how comprehensive the Green Bay Packers’ transfer policy is. After all, if Mr.

Ewing is shot, his sons will not have the time or ability to try to figure out the

policies of all the various teams. They will be too busy trying to figure out

“who shot J.R.?”

As this hypothetical situation illustrates, there are many problems inherent

with the various PSL/Charter Seat Membership/Bond schemes that teams

employ to allow transfers. Additionally, there is more confusion as to which

teams allow transfers of the season tickets and how to go about transferring the

tickets. Therefore, there should either be an automatic property right vested in

the purchaser of the tickets so the tickets pass to heirs like regular property

would, or there should be a uniform policy among all the teams when it comes

to transferring season tickets.

V. IT ISN’T THE ANSWER TO “WHO SHOT J.R.,” BUT IT HELPS

The problems that Mr. Ewing and his sons will face in the future are some

that many season ticket holders could potentially encounter. There are a few

ways to prevent these kinds of problems. One potential solution is for season

ticket holders to receive a vested property interest in the season tickets upon

purchase. Another potential solution is for Congress to pass a statute under its

Commerce Clause authority that creates a uniform season ticket transfer policy

for all sports organizations.

A. Vested Property Interest

A property interest is not automatically created when a season ticket

holder purchases a season ticket.

131

Usually, if a season ticket holder pays an

additional fee for a PSL, or something similar, a property interest is created.

132

However, if the states pass a statute that vests a property right with the season

ticket holders, it will clear up the confusion that arises when trying to bequest

season tickets in one’s will. Each state creates its property law; therefore, each

130

. See id.

131

. See Davis, supra note 13, at 252.

132

. Id.

2012] HOW TO BEQUEST SEASON TICKETS 385

state’s legislature would have to adopt a statute that creates the property

right.

133

If the states create a property right for the season ticket holder, the tickets

will pass to the ticket holder's heirs regardless of whether there is a will or not.

If the ticket holder dies intestate, then the estate will pass to the spouse and

surviving issues.

134

Many bankruptcy courts have already established a

property right in season tickets because teams’ policies have allowed tickets to

be transferred and, therefore, created a reasonable expectancy interest of a

property right.

135

This could potentially pose a problem for teams that do not

allow the transfer of season tickets. If a statute establishes the season tickets as

“property,” a will or intestate law would transfer the tickets, regardless of the

organizations’ transfer policies. A team could lobby against a statute that

would vest a property right with the season ticket holders and argue that

because they never intended to allow the transfer, there was not an expectancy

interest.

Therefore, although this could potentially rectify the problems inherent in

trying to pass season tickets to one’s heirs, it would not entirely remedy the

situation.

B. Each State’s Transfer Policy

If a vested property right cannot fix the innate problems with trying to

transfer one’s season tickets, a uniform state transfer policy based on the Green

Bay Packers transfer policy possibly could. Similar to the hypothetical with

Mr. Ewing, most season ticket holders have an allegiance to the teams within

their own state, even if it is with multiple teams.

136

Like property law, the

state’s statutes and codes govern probate law.

137

Most of the confusion about

who to pass on one’s season tickets stems from the difference between each

team’s policies. If the state passes a uniform transfer policy for within that

state, there will be less confusion and can lead to less litigation. In the

hypothetical involving Mr. Ewing, if the Dallas Cowboys, Texas Rangers, San

Antonio Spurs, and University of Texas Longhorns all employed the same

uniform transfer policy, it would clear up the confusion at the time of Mr.

Ewing’s death.

133

. See, e.g., Property-State Statutes, CORNELL UNIVERSITY LAW SCHOOL, http://www.law.cornell.

edu/wex/table_property (last visited Mar. 10, 2012).

134

. See Intestacy-Dying Without a Will, WILLS-ONLINE, http://www.wills-online.com/willsguide/

intestacy.asp (last visited Mar. 10, 2012).

135

. See, e.g., In re I.D. Craig Serv. Corp., 138 B.R. 490, 502 (Bankr. W.D. Pa. 1992); In re Platt, 292

B.R. 12, 17 (Bankr. D. Mass. 2003).

136

. See discussion supra Part IV.

137

. See, e.g., Your Estate Under Texas Law, WINDOW ON STATE GOVERNMENT, http://www.window.

state.tx.us/taxinfo/taxpubs/tx96_127.html (last visited Mar. 10, 2012).

386 ESTATE PLANNING AND COMMUNITY PROPERTY LAW JOURNAL [Vol. 4:369

The Green Bay Packers policy should set the model for the state to adopt

because it is clear, concise, and thorough.

138

The policy allows for season ticket

holders to fill out the form while still alive, which is available on the Packers’

website, to transfer the tickets currently or upon death. The policy also allows

for the executor of the estate, or an individual with a power of attorney, to have

the tickets transferred if the season ticket holder died without transferring the

tickets.

139

If the holder only has tickets within one state, this would eliminate a vast

amount of confusion and litigation arising from conflicts regarding the passage

of one’s season tickets. However, with the global world we live in today, there

are season ticket holders who have season tickets to teams in multiple states.

Therefore, this would not be the best solution.

C. Nationwide Universal Transfer Policy

The best solution to the inheritance problems with passing on one’s season

tickets at death would be for the United States Congress, under its Commerce

Clause authority, to pass a statute that creates a nationwide universal transfer

policy.

Under its Commerce Clause authority, the United States Congress has the

authority to pass laws and statutes that substantially affect interstate

commerce.

140

For example, purchasing season tickets to a team in New York

when one resides in New Jersey substantially affects interstate commerce,

because the season ticket holder could choose to no longer purchase those

season tickets based on unfavorable probate law in New York.

The nationwide uniform transfer policy should reflect the transfer policy

of the Green Bay Packers. The exact same rights would be granted to the

season ticket holder, and the executor of an estate would have the ability to

transfer the season tickets if the season ticket holder were to die without

completing a transfer form with each team prior to death.

141

With a uniform nationwide transfer policy, there would be a decrease in

litigation arising from the transfer of the season tickets. The only potential

litigation would be that which generally arises when dealing with estates.

Furthermore, the sports team organization would no longer itself be a party to

the litigation. Therefore, the best possible solution to solving the confusion for

season ticket holders is to create a uniform transfer policy for all sports team

organizations in the United States.

138

. Green Bay Transfer Form, supra note 23.

139

. Id.

140

. See United States v. Lopez, 514 U.S. 549, 558–59 (1995) (stating the three categories that Congress

can regulate under the Commerce Clause: 1) the channels of interstate commerce, 2) “the instrumentalities of

interstate commerce, or persons or things in interstate commerce,” and 3) activities that substantially affect or

substantially relate to interstate commerce).

141

. Intestacy-Dying Without a Will, supra note 134.

2012] HOW TO BEQUEST SEASON TICKETS 387

VI. CONCLUSION

When it comes to sports fans and their allegiances to their teams, there will

always be disagreements. However, those disagreements should not arise

between a season ticket holder and the team that he or she loves so dearly. Fans

should no longer have to worry about the confusion that arises from a certain

team’s transfer policy. Nor should fans have to worry about transfer fees being

imposed by the already money hungry team franchise. These problems could

vanish with the adoption of a uniform nationwide transfer policy.

Regardless of what is looming outside the gates of the Coliseum or a

ballpark, fans will always come support their teams. To insure that the fans and

their families continue the tradition and rivalries, it is best that there be a

uniform season ticket transfer policy that helps make that possible. If the teams

will not implement a uniform transfer policy, Congress should. Gods may not

answer letters, but Congressmen do.

by Rachael Rustmann