Rahil

Hal Steinbrenner is never selling the Yankees. Hate to break it to everyone. It makes zero financial sense for him to do so. George Steinbrenner paid $8.8M for the Yankees in 1973. The franchise is worth roughly $11B today.. That is one of the greatest capital appreciation trades in American financial history and Hal is doing everything in his power to never cash it in. A sale today generates a $9.4B taxable gain and a $3.5B tax bill at blended federal and New York rates. Hal isn’t writing a $3.5B check to Uncle Sam. So he’s not selling. The Steinbrenner family will borrow against the franchise instead. Loan proceeds aren’t taxed as income income. The interest is deductible. The asset keeps compounding. You’ve unlocked liquidity from the appreciation without triggering a taxable event that would cost you $3.5B. The Yankees did $705M in revenue last year and reported $7M in EBITDA. A business generating $705M and barely breaking even is not mismanaged. It is managed precisely. Every depreciation schedule, every interest payment, every deductible expense is sheltering income that would otherwise get taxed. The accounting losses are a feature. Hal will pass the franchise to his kids at a stepped-up basis and they will run the exact same play. Think of it this way: Hal is sitting on an asset worth $11B that he effectively inherited for free. If he sells, he hands $3.5B to the government. If he never sells, he borrows against it, lives off the proceeds, deducts the interest, and eventually passes it to his children at full value without anyone ever paying the tax. The Yankees payroll debate is a distraction. Hal isn’t running a baseball team. He owns a generational wealth vehicle that just happens to play baseball.