Wanna buy an NFL team?

Marketplace Staff Jul 17, 2008

Wanna buy an NFL team?

Marketplace Staff Jul 17, 2008


KAI RYSSDAL: I know there’s a credit squeeze going on and all, but if you happen to have a way to borrow a couple of hundred million dollars, the NFL’s got a deal for you. Maybe three of them, actually. The owners of the Pittsburgh Steelers, the Jacksonville Jaguars, and the St. Louis Rams are all said to be looking for buyers. Daniel Kaplan covers the finances of the NFL and its teams for the Sports Business Journal. Dan, good to talk to you.

DANIEL KAPLAN: Great to be here.

RYSSDAL: Is it unusual to have three teams in the league up for sale?

KAPLAN: It’s very unusual. Three teams have changed hands all of this decade. So, it’s extraordinarily unusual. And as the prices keep going up there’s a more and more limited pool of perspective buyers who can afford these things.

RYSSDAL: Let’s run down some of those teams. The most storied, of course — the most well-known — the Pittsburgh Steelers. They’re having some League problems and some family problems, right?

KAPLAN: It’s not necessarily League problems, per se. The situation with the Steelers, they’ve been owned by the Rooney family since 1933. The five Rooney brothers own 80 percent of the team and each owns 16 percent. Their cousins own 20 percent. Under NFL rules the lead owner must have 30 percent. But the Rooneys have been exempted from that. So they’ve gone along swimmingly under this formula for a while, when suddenly some of the brothers’ gambling interests in Florida decided to put in slot machines. And that runs afoul of NFL rules, and so they’re requiring the brothers to sell. The problem is, Dan Rooney, if he wants to buy out one of the brothers, would have to spend probably $160 million, which he certainly doesn’t have.

RYSSDAL: And he’s having problems getting the financing to buy out the rest of them?

KAPLAN: There’s a few issues there. He’s trying to get the financing but the brothers feel he is undervaluing the assets. The four other brothers have hired an investment bank, Goldman-Sachs, to do their own valuation. The second thing you have — it’s waiting in the wings — is Stanley Druckenmiller, the famous hedge-fund manager, perhaps best known for working with George Soros to make a run on the pound in the early ’90s. And he’s a Pittsburgh native, a die-hard Steeler fan, and he’d like to buy the team. The thing that often gets overlooked in this is at the end of the day it’s the NFL that decides who owns this team. And if they want Dan Rooney at the end of the day to own it, I think Dan Rooney will own this team.

RYSSDAL: What about the other two teams, the Rams and the Jaguars?

KAPLAN: Well, both the Rams and Jaguars are poking around the market. The Rams were inherited by their two current owners from their deceased mother earlier this year. The two owners will be facing a large estate-tax bill, so they are looking at potentially selling the team, though they say they are not actively looking to sell it. The Jaguars are owned by Wayne Weaver, the founder of Nine West, and had long been thought to want to exit professional football, and he has been talking to potential buyers for several years now.

RYSSDAL: Granted, you’ve got appreciating asset values in these teams. But I’m wondering whether the credit squeeze and the financial crisis are having any impact on League finances and team finances.

KAPLAN: Around the edges. Mind you, the League is right now in the midst of a big labor struggle. They have a labor crisis on the horizon. So, they’re going to put out a lot of rhetoric to that effect, that the economy’s having a big effect. But I liken the NFL to Manhattan real estate. Is it completely immune to larger economic forces? No. But, by and large, you’re talking about a different animal.

RYSSDAL: Daniel Kaplan covers the NFL for Sports Business Journal. Dan, thanks a lot for your time.

KAPLAN: No problem.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.