It's really a Golden Goose laying Golden eggs for Jody. I wonder if there are any constraints on who she cannot see too?
At a time when the value of NFL and NBA teams continues to mushroom, there’s no reason to sell now. As to the Seahawks, the deal to build the team’s stadium contains a requirement to give 10 percent of the proceeds to the state of Washington if the team is sold before May 21, 2024. Still, it’s unclear how long the estate will keep the Seahawks after May 21, 2024. As purchase prices go from a record high of $4.65 billion last year to $6.05 billion this year, why not wait?
Still haven't heard the "anti-Tank" brigade put together a single coherent thought that isn't wildly speculative, on what they would be doing differently with this team.
care to elaborate? I know a super-yacht was sold; and a majority of PA's art collection (1.5B). Also, about 250-350M in real estate. If PA's estate was valued at the reported 20B, those real estate sales would amount to less than 2% of the estate. And from what I've read it may be that those holdings had the highest expenses and the most risk https://www.businessinsider.com/paul-allen-estate-sells-real-estate-seattle-nyc-2022-7 https://www.nytimes.com/2022/11/09/arts/design/paul-allen-auction-christies.html I saw an article in a Seattle paper a couple of months ago that said that the total liquidation value of the assets sold in the 6 years since PA died was less than 8% of the estate's value. but mostly, the article said that publicly available information on the trust's operation only outlined vague timelines. That the proceeds from any sale of assets did not need to be converted into immediate transfers into charities, but instead could be folded back into the estate and transferred at a 'later' time. In other words, it might be that the 1.5B in proceeds from the art collection sale could have been dumped back into funds the estate manages. Same for the real estate. I've tried to google how much the estate had donated to charity since his death, but that information seems pretty vague Jody Allen can have two intentions that aren't really in conflict: one is that she fully intends to donate the estate to charity. The other is that she intends to slow-walk those donations for years. That's what most would do if they were earning 3% of the state's value every year as the executor.
It would probably make sense to sell high expense, high risk assets. The problem we have is that we don't have a full listing of what assets Paul owned, and what has been sold. We know some stuff has been sold. We don't necessarily know the full list of what's been sold. We know some stuff that hasn't been sold. We don't necessarily know the full list of what hasn't been sold, but we do know the Blazers haven't been sold. But is that an actual fact, or is that just a result of adding up what's publicly known to have been sold? Yes, exactly. There is so much we don't know. It would sure be nice if the process was more transparent. However, should we assume the worst? Because we don't know the details, should we assume Jody is greedily grabbing as much of the estate as she possibly can? Should we assume she is using that money to fund ISIS? Is she, in fact, Satan? Of course she is! The team is not very successful, obviously it's because she's an evildoer. Those are in conflict - if she's really draining the estate, then she doesn't fully intend to donate it. But we don't even know if she gets paid at all for managing the trust, much less that it is 3% of the estate's value every year. That's just a completely made up number, isn't it? barfo
she's gettng paid. The link to PA's will and estate plan was posted here a while back. In the will, she is named the executor and the will explicitly says a "reasonable" management fee for the executor will be paid as for the fee itself, the actual percentage is unknown, and again what i a "reasonable" fee is very vague. But there is this: my half-brother (CPA) was the executor of a family estate in Colorado value around 12M. It took a little over 3 years to settle the estate and his fee (for him and his firm) was 2.75% annually.
One might argue that while 300K might be a reasonable annual estate management fee for a legitimate CPA firm, perhaps $600m/year might be considered a tad excessive for an unqualified sibling. But hey, who am I to judge?
Not quite the connotation of "argue" that I was intending. Replace that with "suggest", "venture", "opine", or "posit" if you'd prefer.
by the way, my brother was appointed executor by the Will and, IIRC, the fee was set by the probate court as for Jody Allen, I would be pretty certain there is a large staff of people as part of her management organization. And whether it's Charles Schwab or Fidelity, if an elite brokerage is managing the portfolio of a millionaire/billionaire the fee will be in the 1-2% range. And that is just money management (and the brokerage will have all sorts of clever ways to leverage more fees). An executor, like JA, would have the responsibility of managing money, real estate including commercial property, yachts, various business corporations and partnerships, professional sports teams, airplanes, art, collectibles, etc. A 20 billion estate like PA's is going to be pretty complicated by the way, in 2019, Vulcan Management had 700 employees. They were in the process of downsizing and converting into the Vale Group. That company currently has 337 employees https://www.linkedin.com/company/vale-group-llc what percentage of their business is part of the estate I don't know. I'd imagine quite a bit of it obviously, I could be off in my guesses, but I think people might be underestimating the complexity of managing the estate and the scope of the fees. If it's a 300-600M fee, 30-50M of that, at minimum, would be consumed by employees and infrastructure involved in the management.
If I'm reading it correctly, from your link, that 2.5-3% is not an annual fee. It is the total compensation for the executor. Which makes far more sense. And would give her little to no reason to hold on to the Blazers just to pocket all that executor money.
And I get that, but my point is that nobody is probably going to push back as long as she doesn't charge over the 5% that Washington says is reasonable and typical... It doesn't matter to anybody as far as I can tell.
that may be correct but there are also provisions for expenses accrued by management. If the estate takes 15-20 years to settle in full, all those employees of JA's management firm (which is apparently now the Vale Group) haven't been working on spec, and I'd be pretty sure JA isn't paying them out of pocket I'd guess if the Vale Group is submitting expense claims to the probate court, and the claims approved, JA is getting her share since she is a co-founder and chairman it could be that the fee is 2-5% of 20B, plus annual expenses until the estate is fully converted
Sure, so she's paying people to manage his estate, covered by the estate. Which makes sense. But this talk that she's getting 2-3% PER YEAR has always seemed a little ridiculous to me. Happy to say I was wrong if it is ever shown to be the case. But saying it could take 10-20 years, the thought that out of a 20 billion dollar estate, in 2o years of "closing it", she'd pocket 12 billion of that is a little ridiculous to me. And if it is just a flat percentage, and then management fees, there's not this 90-150 million dollar PER YEAR reason for Jody to not sell that Canzano claimed.
yeah, that's fair and a 12B fee is ridiculous but that doesn't mean JA has no reasons to slow-walk the process here's a for instance: PA's art collection was sold for 1.5B. The article I read said that the sale price(s) really surprised a lot of people. That leads into estate valuation. The articles I read generally seemed to indicate that the executor had to supply an estimated appraisal of the estate value in a reasonable amount of time...like 3 to 6 months. OK. If that appraisal pegged the value of the collection at 700M in 2018. And 4 years later that collection sold for 1.5B, what is JA's fee based upon? the 700M or the 1.5B? My expectation would be the higher amount. if a commercial property is appraised at 1M and it sells for 2M, then the market value of the property is set 2M and that's the basis for tax and depreciation. Which illustrates that maybe JA was playing the game to her advantage by waiting 4 years for the sale of the art which leads into the Blazers. When PA died in 2018 the value of the Blazers was 1.3B https://www.forbes.com/pictures/5a73949c31358e4955ac5752/16-portland-trail-blazers/?sh=30ceef5d3d13 the value of the Blazers last October was 3.08B. It may be over that currently, I don't know. But that points to a 1.8B gulf between when PA died and now. If JA's fee is 4% (most complicated trust in Washington history), then her fee at 1.3B would be 52M and her fee for 3.1B would be 124M. If that's how the fee is calculated, that kind of asset appreciation is plenty of incentive to slow the liquidation
I wonder how much Jody's handlers are getting paid to make sure she keeps her hands off male employees?
