Sale of 30% interest in an NFL team to "launch" in 9/10

[ICanSleepWhenI'mDead]

Sal Galatioto is a "sports investment banker" who was a guest today on the "Strategy Session" show on financial news network CNBC. While discussing the sale of sports franchises generally, he said:

 

"We are involved in the sale of limited partnership interests [in sports teams] all the time. ... We're launching the sale of a 30% interest in an NFL team in September."

 

Sal would not identify the team involved, but said the sale was being made to deal with "estate planning and other issues." He also made other comments about how the sale of limited partnership interests in sports teams are typically done quietly and "person-to-person."

 

Seems to me like there's no particular reason to think the unidentified NFL team is the Bills, because there are probably a lot of teams with owners who need to deal with estate planning issues. I don't follow ownership details of other teams, though.

 

For background on Sal Galatioto, see this 6/3/10 Business Week article:

 

http://www.businessweek.com/magazine/conte...ets+%2B+finance

 

Here's the website for his firm:

 

http://www.gspcap.com/GSPWeb/Home.jsp?1

 

Anybody know enough about the ownership situtation of other teams to speculate about which NFL team will be trying to sell a 30% limited partnership interest in September?

[dollars 2 donuts]

That's interesting.

 

Thank you, Icansleep.

 

It would be a little funny if Ralph finally said to himself, "man, I am not going to be around forever, I should take care of this...I'll take a nap first."

[richNjoisy]

That's interesting.

 

Thank you, Icansleep.

 

It would be a little funny if Ralph finally said to himself, "man, I am not going to be around forever, I should take care of this...I'll take a nap first."

 

 

O.K. Let's say it is the Bills. What would this mean for the big issue - the move of the Bills after the death of Ralph? More likely? less likely?

If the 30% were to a local businessman or group, same question.

[Skoobydum]

Hhhhmmmmmmm, interesting. It makes sense for it to be Buffalo because of Ralph's age and he is most likely to have an estate soonest.

[Got_Wood]

I also heard that Elway has expressed interest in buying a piece of the Broncos as well. See here:

 

http://www.nytimes.com/2010/07/25/sports/f.../25broncos.html

 

 

However, I would be ecstatic if the Bills were going this route. Could be huge for this franchise!

[Skoobydum]

I also heard that Elway has expressed interest in buying a piece of the Broncos as well. See here:

 

http://www.nytimes.com/2010/07/25/sports/f.../25broncos.html

 

 

However, I would be ecstatic if the Bills were going this route. Could be huge for this franchise!

 

Unless of course the 30% owner was based out of LA, then it would be hugely bad.

[Maddog69]

O.K. Let's say it is the Bills. What would this mean for the big issue - the move of the Bills after the death of Ralph? More likely? less likely?

If the 30% were to a local businessman or group, same question.

 

Depends on who the buyer would be.

If it's Jim Kelly's group, the chances of the Bills staying would increase.

If the Toronto group or the guy looking to move a team to LA were the buyer, then obviously the chances of the Bills leaving would increase.

 

Just like the questions QB situation, only time will tell how the ownership situation shakes out and whether or not the Bills stay in WNY.

[TheLynchTrain]

Have all the issues been ironed out with the Rams? Couldn't find any definitive articles if Kroenke actually buying them. I know he already owns a 40% share.

[dwight in philly]

Depends on who the buyer would be.

If it's Jim Kelly's group, the chances of the Bills staying would increase.

If the Toronto group or the guy looking to move a team to LA were the buyer, then obviously the chances of the Bills leaving would increase.

 

Just like the questions QB situation, only time will tell how the ownership situation shakes out and whether or not the Bills stay in WNY.

the obvious is that if it is the bills and it is a L A or toronto investor, the news would not be good. flashback to john y brown. if it is the bills, it has to be a local person, all the usual suspects, jeremy jacobs, jim kelly, golisano, etc. i would view the latter as good news.

[ICanSleepWhenI'mDead]

Here's a video clip of the CNBC interview. The NFL team comments are about 4 minutes into the 5 minute clip.

 

http://www.cnbc.com/id/15840232?video=1564983737&play=1

[Captain Caveman]

If Ralph is selling 30% for cash so that his family can afford to pay the estate tax on the team after he dies, then it's a good thing. But as he's said in the past, his family really isn't interested in taking over the team, so it's probably not this.

[BuffaloRebound]

Took a sports business class he taught at Columbia a few years back. He talked as if he had a relationship with Ralph in the past. Not sure if that means anything as Sal seems to work with most of the professional sports teams out there. Sal also joked about Ralph basically making money every year of the Bills existence and banking it instead of putting it back into the team.

[Buffalo_Stampede]

If Ralph is selling 30% for cash so that his family can afford to pay the estate tax on the team after he dies, then it's a good thing. But as he's said in the past, his family really isn't interested in taking over the team, so it's probably not this.

What if his family owned the team and put lets say Russ Brandon in charge of running its operations? I find it interesting that this comes up in a year Ralph Wilson basically gave Russ Brandon control of the Buffalo Bills as Team President and Ralph stepped aside.

[dwight in philly]

Took a sports business class he taught at Columbia a few years back. He talked as if he had a relationship with Ralph in the past. Not sure if that means anything as Sal seems to work with most of the professional sports teams out there. Sal also joked about Ralph basically making money every year of the Bills existence and banking it instead of putting it back into the team.

that i can certainly believe!, i have gone back and forth in my mind over ralph and thoughts based on that premise does get under my skin. i do think ralph has made many mistakes and going over them doesnt serve a purpose now, his legacy will be determined as to how the bills ownership situation plays out upon his death. if there is a solid succession plan to assure the team stays in buffalo, then it is fine. if not, and they just get sold to the highest bidder, then his TRUE colors will be shown , and all the positives that he did bring to the area will forever be stained.

[Fingon]

Selling 30% of the Bills to Jim Kelly's group would be a great thing. His group would only have to raise enough for 21% more of the team in order to keep them in Buffalo.

[Skoobydum]

Selling 30% of the Bills to Jim Kelly's group would be a great thing. His group would only have to raise enough for 21% more of the team in order to keep them in Buffalo.

[richNjoisy]

 

 

I would say it would be even a bigger deal than that - the Kelly group - if they owned 30% - would have a huge say in who buys the Bills. They obviously would have a huge advantage over other buyers.

[Nanker]

Hhhhmmmmmmm, interesting. It makes sense for it to be Buffalo because of Ralph's age and he is most likely to have an estate soonest.

Al Davis born 1929

Bill Bidwell born 1931

Virginia McCaskey born 1923

Jerry Jones born 1942

Pat Bowlen born 1944

William Clay Ford, Sr. born 1924

Tom Benson born 1927

John Mara born 1954

Steve Tisch born 1949

Alex Spanos born 1923

Bud Adams born 1923

 

Ralph Wilson born 1918 isn't that unique. I submit that all of these owners need to consider estate planning.

[Captain Caveman]

What if his family owned the team and put lets say Russ Brandon in charge of running its operations? I find it interesting that this comes up in a year Ralph Wilson basically gave Russ Brandon control of the Buffalo Bills as Team President and Ralph stepped aside.

 

I don't know what you're getting at. Are you talking about after he dies? Right now Ralph is the sole owner. He can't give the team to his kids now because he would have to pay a gift tax (so that people can't just give away things before they die to avoid the estate tax.)

[JohnC]

that i can certainly believe!, i have gone back and forth in my mind over ralph and thoughts based on that premise does get under my skin. i do think ralph has made many mistakes and going over them doesnt serve a purpose now, his legacy will be determined as to how the bills ownership situation plays out upon his death. if there is a solid succession plan to assure the team stays in buffalo, then it is fine. if not, and they just get sold to the highest bidder, then his TRUE colors will be shown , and all the positives that he did bring to the area will forever be stained.

 

Ralph's true colors have already been established a long time ago. The Bills are a profit center for him. The franchise is simply a very lucrative business. That is his legacy. He has no ties to the area. He resides in Michigan and has a Florida residence. None of his family live in western NY. He flys in for the games in his corporate jet and flys out after the games.

 

Ralph has been the sole owner of the Bills for half a century. Franchise profits only go to him. He is not going to share it with any minority partner. Why should he? Each year he can expect to have his very valuable franchise appreciate in the vincinity of 7%. He is not going to share that value with anyone else. Why should he? Presently, he is making in the vincinity $30-35 M a year. The longer he hangs on the more profit he gets and the greater his franchise appreciates.

 

This is an owner who has insisted on relatively easy terms for a lease buyout for him and to a lesser extent for an outside buyer. This is the same owner who when he announced the $78 M deal at the podium in Toronto lamented the limited market in western NY and praised the more lucrative market in Toronto.

 

Anyone who thinks that Ralph is going to make a deal with a local buyer and offer him a discount doesn't know this tough businessman very well. The owner is going to have his team auctioned off to the highest bidder when he passess. From the proceeds the taxes will be payed and the beneficiaries will receive what is left, which is still very substantial.

 

Ralph has owned the Bills for half a century and has run the team in a certain way. He is not going to change the way he operates at this late stage of his life. He is very adept at extracting money from a business and has little motivation putting back into the business. Ralph is an owner who doesn't particularly care what others think. He keeps his business and thinking to himself without worrying how he will be perceived. He lives in his own insular world.

 

Those people who think that he is the owner who is arranging to bring in a hometown buyer and start the transition of selling the team are very mistaken. Ralph is Ralph. If you don't get it after a half century of ownership you will never get it.