Back on October 11, Bloomberg reported that the NFL was “considering drastically increasing the amount of money prospective owners [would be] allowed to borrow.” The proposed change would increase the league’s debt limit from $350 million to +/- $1 billion. The prevailing narrative has been with team valuations skyrocketing (see: +175% since ’09) and low debt limits, that the prospective pool of buyers able/willing to pay the numbers “everyone thinks these [teams] are carrying” is shrinking.
But 49ers president Al Guido suggested – in a wide-ranging interview with JohnWallStreet – that the problem isn’t nearly as dire as some have suggested. “During the Carolina Panthers [sale, the lack of qualified buyers] was highly debated in the public. I’m not so sure how real that [was] behind the scenes. [The league] had interested buyers across the board.” He went on to point out that “there [have] been limited partnership stakes sold in both the Atlanta Falcons and Pittsburgh Steelers and [finding a buyer] hasn’t seemed to be an issue [for non-controlling owners, either].
Howie Long-Short: As Guido noted, the qualified interest (or lack thereof) in the Carolina franchise has been subject to much debate, but as one prominent sports financier said, what cannot be disputed is the price that David Tepper paid ($2.275 billion) was “less than what the market expected [the team] would command.”
That certainly wasn’t the case in Atlanta, where Arthur Blank managed to sell a 10% stake – without a non-control discount – at a $3 billion valuation earlier this year. Interestingly, the one new investor (the other two that were part of the group were existing shareholders) in the Falcons franchise is Alan Kestenbaum – among those reported to have submitted a bid to take down the Panthers.
As for the Steelers transaction, TRIBLIVE.com reported back on July 27 that while Carolina owner David Tepper was “no longer a minority shareholder” in the Pittsburgh football team, his “stake in the franchise [had] yet to be transitioned to another buyer.” One NFL insider suggested at the time that delays in unloading the limited partnership (remember, Tepper bought the Panthers back in May ’18) could be attributed to Steelers control owner Dan Rooney’s focus on football matters.
Apparently, Oct. 15-16 NFL owners’ meetings served as a pseudo deadline for the Rooney family to get a deal done because multiple sources have told JohnWallStreet that the sale of a ten percent stake in the franchise was finally approved last week in Palm Beach, Florida.
Details of the purchase remain scant, but one NFL insider suggested the team’s newest investors (one is said to be a friend of the Rooney family, the other is apparently based out of New York) received a ‘standard’ twenty-percent non-control discount on a valuation “within the ballpark” of Forbes’ $2.8 billion estimation.
Requests for the NFL to address why there would be a need to raise the debt limit if existing ownership groups are finding investors that are willing to buy in at rising valuations went unanswered.
Fan Marino: Back in August, TMZ reported that Jay-Z was set to purchase a significant stake in an NFL team. That story patently false (we told you that was the case in Early Entrants: Vol. XVI), but a source with knowledge of the discussions tells JWS that the Pittsburgh Steelers were the team that the Roc Nation founder had been pursuing an interest in.