Wednesday, June 21, 2023
When Microsoft co-founder Paul Allen passed away in 2018, he left instructions with his sister, Jody Allen, the executor and trustee of his estate, to sell his assets and donate a majority of the proceeds to charity. His assets were valued at more than $20 billion at the time, which included a record $1.5 billion trove of art, multiple properties, two yachts, and a handful of professional sports teams, including the NBA’s Portland Trail Blazers.
Billionaire Nike co-founder Phil Knight has joined forces with real-estate investor Alan Smolinsky to offer Ms. Allen $2 billion to buy the Trail Blazers. Allen rejected their bid with no counteroffer or even a phone call. Her message publicly has remained clear: the Trail Blazers are not for sale. She has made similar statements regarding the National Football League’s Seattle Seahawks, which Paul Allen also owned.
Allen’s estate is an example of how simply pledging assets to charity may not be so simple after all. Allen was an early signer of the Giving Pledge, a movement among the ultrawealthy to commit the majority of their wealth to philanthropy. A spokesman for Allen has estimated that it may take 10-20 years to settle the estate, however, experts say it would be highly unusual to take such a long time to do so. “You would almost have to intentionally slow-walk it,” says Allan Cutrow, a partner at Mitchell Silberberg & Knupp, LLP.
The NBA requires any team held by an estate to be transferred within a “reasonable time period,” which is ultimately determined by the league, and per the instructions left for Ms. Allen, she is under no obligation to sell the estate property within a specific time frame.
One factor that may compel her to hold onto the Seattle Seahawks for at least another year is related to bonds sold to fund the stadium construction. A public referendum that passed in 1997 required that 10% of the team’s selling price go to the state of Washington if the team was sold within 25 years, which ends on May 21, 2024.
For more information see Rachel Bachman “The Mystery of the NBA Tream That Billions Can’t Buy” The Washington Post, June 4, 2023.
Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.