The feds want their ton of flesh from the bones of Jack Kent Cooke in the next 60 days, and his estate is scrambling to raise the cash. The late Redskins owner’s estate faces its first Internal Revenue Service hurdle Jan. 7 when the asset-rich, cash-poor trust has to deliver a check to the IRS for more than $25 million and disburse nearly another $50 million to heirs or face a seizure of assets to cover the debt, according to calculations done for Washington City Paper by Virginia tax and estate planning attorney Leigh-Alexandra Basha.
Cooke bequeathed a total of $47,750,000 in cash and trusts to family members, friends, and employees in his will. The amount is federally taxed at 55 percent for the first $20 million and at 60 percent above that, according to the tax code. If you do the math, that means that the estate has to come up with $25 million for the feds in January, with no extensions available. And by law, the heirs’ inheritance has come due, so look for a fire sale on some hefty assets so the estate can meet some looming obligations.
The Los Angeles Daily News is for sale, though the Cookes’ lawyers are quick to disclaim any urgency to sell the property. Another trophy, New York’s Chrysler Building, has been allowed to slip into foreclosure, with one potential buyer vowing to remodel it into the world’s tallest hotel.
Basha points out that Virginia law allows the estate five years from the date of Cooke’s death to sell all the remaining assets, which includes the Redskins. The cash from those holdings will accrue to the coffers of his charitable children’s foundation and be used to fund orphanages or underprivileged youngsters’ educations. Under Virginia law, a charity cannot own or manage a business, so everything in the Cooke empire will have to be dismantled and new owners found.
The big question, of course, is how will John Kent Cooke come up with the $150 to $160 million he’ll need to gain a controlling interest of the team (he already owns a reported 10 percent), his stated goal. The Redskins are currently estimated to be worth about $400 million, if you count the new stadium. The $25 million he was given by his father is mandated to be paid out at $2 million per year over five years, with $15 million of it in trust, the principal untouchable by him (even though a majority of that money reverts to the children’s charity upon his death).
Because Cooke’s only living son never amassed individual wealth while living in his father’s shadow, he undoubtedly will have to find an affluent partner if he wants to retain day-to-day control of the franchise.
But who has the kind of bulging bank account and booming ego needed to play owner for the Skins? A flurry of names springs to mind. Perhaps the Haft family could step in as the one Washington clan that can claim even more dysfunction than the Cookes. Or maybe the Donald could be won over with a special package deal: the Chrysler Building and Empress Marlena, too.
Then again, the obvious solution is probably Ted Turner. After all, the man owns everything else: a baseball team, half the cable channels on the air, and a chunk of the United Nations. And in keeping with the Skins’ history, the team would once again be the personal plaything of a self-important twit married to a piece of vacuous human jewelry. Why stop now? CP