$300,000,000 Tom Brady Has a Personal Motive Behind New Investment Venture With Hedge Fund Manager

Tom Brady never shies away from expanding his horizons. The former QB decided to dip his toes in the English soccer scene. However, he raised eyebrows with his latest move to invest in a second-tier soccer club. Brady is embracing the role of minority owner of Birmingham FC, partnering with Knighthead Capital Management, founded by hedge fund manager Tom Wagner, who acquired the club just last month along with its stadium.

Brady, assuming the chair of the advisory board, expressed his enthusiasm to join the club rich with “history and passion” and stated that his goal was to elevate the “second-city club second to none.”However, is that all behind Brady’s move to get a piece of the money-losing soccer team that finished 17th in England’s Championship league last season and has remained outside the coveted Premier League since 2011?

Another strategic move from Tom Brady

With an illustrious career over decades, it might not be shocking that Brady has racked up an impressive fortune. The 46-year-old boasts a net worth of $300 million from his career earnings, entrepreneurial ventures, and various other endorsements. Brady is also reportedly poised to become an investor in the Las Vegas Raiders. Yet  Brady’s decision to invest in a seemingly sinking ship, that has been on the decline for years, might have other reasons.

According to Forbes, the potential tax breaks might have lured Brady to take up a minority stake in the FC. “Birmingham City will likely lose money again this year and perhaps into the foreseeable future. The losses to which Brady is entitled would be passive activity losses, and hence non-deductible unless Brady “materially participates” in the activity..”, it observes.

It further recognizes that if Brady fulfills two conditions, the former QB could offset his taxes. As per the first condition, if Brady “participates in the activity for more than 500 hours during the taxable year.”, something that aligns with his role as the chairman of the advisory board, he could claim benefits.

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The second condition demands Brady have a sufficient stake in this partnership to “absorb” the loss, which will not pose a problem as he could include some of the team’s debts in his investment, thus allowing him to claim taxes on the potential losses. The decision likely resulted from careful deliberations especially since Brady has incurred some losses from previous investments.

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