A multiyear legal dispute centering on the right to match an offer to buy the Denver Broncos was clarified on Tuesday when Judge Shelly Gilman of Denver’s Second District Court nullified a contractual right of first refusal (ROFR). The move could pave the way for the most expensive team sale in U.S. sports history.
A group representing the team’s owners—a trust representing the late Pat Bowlen and Bowlen Sports—have argued that the ROFR, found in a 1984 purchase and sale agreement of the Broncos, is not enforceable.
The plaintiffs insist that the ROFR lost effect when Bowlen and Edgar Kaiser Jr., the person from whom Bowlen bought the team in 1984, passed away. (Bowlen died in 2019 and Kaiser died in 2012.) The plaintiffs maintain the ROFR was an understanding between the two late men, rather than a contractual term that bound the franchise thereafter.
On the opposite of the litigation are the Kaiser Estate and a holding company. The defendants assert that the ROFR has continued in effect. As they explain the ROFR, its responsibilities and obligations were assigned to successors of Bowlen and Kaiser. They have also argued the ROFR was essential to the 1984 transaction since Kaiser allegedly wanted final say on who would own the Broncos in the event Bowlen attempted to sell. The two sides went to trial last fall.
Judge Gillman held that the ROFR is no longer enforceable. This means the Kaiser defendants will not receive a chance to match a sale, nor will they receive notice of a pending transaction (which would separately need approval by the NFL). The judge’s order can be appealed.
Sportico recently valued the Broncos at $3.8 billion. Team officials have interviewed potential bankers to assist in the sale of the franchise. A sale of the team would be a multistep process closely monitored by the league. The previous record for a team sale occurred in 2018-19, involving Joe Tsai taking control of the Nets and Barclays Center. The team was valued at $3.3 billion.
While the Broncos appear more likely to be sold, there remain complications on the ownership side. A major hurdle is that Bowlen passed away without naming a successor, and his seven children aren’t in agreement on how the Broncos should be controlled. Through a trust, each of the seven own about 11% of the team. This uncertainty would likely need to be resolved before any sale could take place.
In addition to an uncertain future for their ownership, the Broncos are also seeking a new head coach. On Sunday the team fired Vic Fangio after finishing 7-10, last place in the AFC West. In a statement to a media outlet Tuesday evening, Broncos president Joe Ellis said the team’s focus was on the coaching search and that an announcement on ownership would follow the completion of that hiring process.