BillnutinHouston Posted October 12, 2011 Share Posted October 12, 2011 (edited) Let's say Ralph WILL sell the team to the highest bidder upon his death, as some have speculated. Is it out of the question that he could do this and STILL lock up the Bills in Buffalo before he goes? Just for discussion purposes, I say yes. What is the one HUGE chip Ralph has in his possession at this stage of the game? It's in his sole and exclusive right to execute a new stadium lease on behalf of the team. Ralph will be entering into new lease negotiations with the County - maybe they've already started. Let's say he says to the County, let's establish a fee for the team breaking the lease, in the event that the franchise relocates. How does, say, $300 million sound? My theory is, if Ralph agrees to a lease-breaking fee that essentially makes future relocation of the franchise cost prohibitive to a new owner, has he not accomplished long term stability of the franchise in WNY from beyond the grave? Doesn't a new owner have to abide by all the terms and conditions of the lease agreement that Ralph signs? It is true that this plan would make SOME investor groups think twice about entering the bidding (if they happen to not like WNY or have their hearts set on locating in a particular city like LA), but I submit that this arrangement would still generally allow market forces (supply and demand) to dictate the team's sale price, meaning a pretty penny for the Wilson estate. This would allow Ralph to ensure a nice sale price, all the while locking up the Bills in WNY for the foreseeable future. Tell me where my plan is flawed - for example, does the league have jurisdiction over the terms of a stadium lease and therefore the ability to shoot down constructs like this? Etc. Edited October 12, 2011 by BillnutinHouston Link to comment Share on other sites More sharing options...
May Day 10 Posted October 12, 2011 Share Posted October 12, 2011 that doesnt really allow for maxing out to the highest bidder. In fact, if the team is locked in WNY, it would likely eliminate competition. Also, if there is a buyout of $300 Million, that price may devalue the team and come off the sale price. Link to comment Share on other sites More sharing options...
BuffaloBill Posted October 12, 2011 Share Posted October 12, 2011 Remember there are two (or three or four depending on how you want to look at it) parties to the stadium lease. The primary parties in the lease agreement are the county and the Bills (other parties may be the State and the NFL). The county (probably alsong with the state) will have to pony up fairly significant money to get the deal done. It will also be interesting to see if the NFL fronts any funds towards stadium improvements. Link to comment Share on other sites More sharing options...
Albany,n.y. Posted October 12, 2011 Share Posted October 12, 2011 Why not just make it an iron clad lease with no escape clause at any price? Link to comment Share on other sites More sharing options...
Mr. WEO Posted October 12, 2011 Share Posted October 12, 2011 Let's say Ralph WILL sell the team to the highest bidder upon his death, as some have speculated. Is it out of the question that he could do this and STILL lock up the Bills in Buffalo before he goes? Just for discussion purposes, I say yes. What is the one HUGE chip Ralph has in his possession at this stage of the game? It's in his sole and exclusive right to execute a new stadium lease on behalf of the team. Ralph will be entering into new lease negotiations with the County - maybe they've already started. Let's say he says to the County, let's establish a fee for the team breaking the lease, in the event that the franchise relocates. How does, say, $300 million sound? My theory is, if Ralph agrees to a lease-breaking fee that essentially makes future relocation of the franchise cost prohibitive to a new owner, has he not accomplished long term stability of the franchise in WNY from beyond the grave? Doesn't a new owner have to abide by all the terms and conditions of the lease agreement that Ralph signs? It is true that this plan would make SOME investor groups think twice about entering the bidding (if they happen to not like WNY or have their hearts set on locating in a particular city like LA), but I submit that this arrangement would still generally allow market forces (supply and demand) to dictate the team's sale price, meaning a pretty penny for the Wilson estate. This would allow Ralph to ensure a nice sale price, all the while locking up the Bills in WNY for the foreseeable future. Tell me where my plan is flawed - for example, does the league have jurisdiction over the terms of a stadium lease and therefore the ability to shoot down constructs like this? Etc. Conisdering the last buyout started at 20 million and was down yearly to 2 million currently, good luck with that. Anyway, there are 2 obvious flaws. First, it would be far cheaper for a new buyer (if he was to move the team) to just pay the rent every year of the lease than to pay a ridiculous penalty. Second, the new owner would immediately want to re-negotiate those lease terms that he didn't agree to or sign and of course the county would roll right over, as they always do. Link to comment Share on other sites More sharing options...
rpcolosi Posted October 12, 2011 Share Posted October 12, 2011 becuase a wealthy owner can still buy the team, keep in WNY for 10 years, and then bounce. This doesnt work, though the County will still put a lease-breaking clause in there as it is standard. The likely scenario is that his wife assumes control and she, not the estate, sells it to whom she desires. This circumvents the need for an estate to be involved at all with the sale. Link to comment Share on other sites More sharing options...
dollars 2 donuts Posted October 12, 2011 Share Posted October 12, 2011 (edited) that doesnt really allow for maxing out to the highest bidder. In fact, if the team is locked in WNY, it would likely eliminate competition. Also, if there is a buyout of $300 Million, that price may devalue the team and come off the sale price. This. It is the equivalent of putting Bills fans on his shoulders only to turn around and kick his family hard in the privates...so to speak. Edited October 12, 2011 by dollars 2 donuts Link to comment Share on other sites More sharing options...
SRQ_BillsFan Posted October 12, 2011 Share Posted October 12, 2011 Ralph could easily put in his will that the team needs to be sold to the highest bidder that would keep the team in Buffalo as his 1st option with a minimum price, if not meet all then sold to the highest bidder a where. No lease needed. Link to comment Share on other sites More sharing options...
georoc01 Posted October 12, 2011 Share Posted October 12, 2011 My understanding was that the Bills wanted to negotiate a new 10 year lease but Erie County isn't interested. Link to comment Share on other sites More sharing options...
LabattBlue Posted October 12, 2011 Share Posted October 12, 2011 My understanding was that the Bills wanted to negotiate a new 10 year lease but Erie County isn't interested. Negotiations haven't even started, so I don't know how this can be the case. Link to comment Share on other sites More sharing options...
tennesseeboy Posted October 12, 2011 Share Posted October 12, 2011 okay okay..I'm a homer but I think there is a strong case to be made for keeping the team in Buffalo. We have Western New York and Canada and cover a pretty major market. LA? two teams have failed there and there is no reason to presume the pro team would be successful. I'm not seeing any for sure market that would warrant giving up fifty years of building a loyal base. I suppose a lot of it will involve commitments regarding the stadium, rebuilt or new...but I am optimistic that Buffalo will in the final analysis be the best market for this team. Link to comment Share on other sites More sharing options...
BillnutinHouston Posted October 12, 2011 Author Share Posted October 12, 2011 (edited) that doesnt really allow for maxing out to the highest bidder. In fact, if the team is locked in WNY, it would likely eliminate competition. Also, if there is a buyout of $300 Million, that price may devalue the team and come off the sale price. Agree it would limit competition somewhat. How much, nobody really knows. There is nobody who can speculate how many different prospective ownership groups will come out of the woodwork. Conisdering the last buyout started at 20 million and was down yearly to 2 million currently, good luck with that. Anyway, there are 2 obvious flaws. First, it would be far cheaper for a new buyer (if he was to move the team) to just pay the rent every year of the lease than to pay a ridiculous penalty. Second, the new owner would immediately want to re-negotiate those lease terms that he didn't agree to or sign and of course the county would roll right over, as they always do. Exactly who would object to a high excape fee? Only the NFL, as far as I can tell. The County would love that high fee, and Ralph won't care. Why would the County "roll over", if the lease contract has the team locked in? As for the new owner, he willingly accepts those terms when buying the team. becuase a wealthy owner can still buy the team, keep in WNY for 10 years, and then bounce. This doesnt work, though the County will still put a lease-breaking clause in there as it is standard. If you're hoping for a permanent fix, good luck finding it. Ralph could easily put in his will that the team needs to be sold to the highest bidder that would keep the team in Buffalo as his 1st option with a minimum price, if not meet all then sold to the highest bidder a where. No lease needed. Maybe, but how would a prospective owner certify with legal sufficiency that they'll keep the team in Buffalo as long as they own the team? okay okay..I'm a homer but I think there is a strong case to be made for keeping the team in Buffalo. We have Western New York and Canada and cover a pretty major market. LA? two teams have failed there and there is no reason to presume the pro team would be successful. I'm not seeing any for sure market that would warrant giving up fifty years of building a loyal base. I suppose a lot of it will involve commitments regarding the stadium, rebuilt or new...but I am optimistic that Buffalo will in the final analysis be the best market for this team. Agree that Buffalo is a nice market - profitable, but that's primarily because it has no stadium-related debt. However, in a "highest bidder" scenario, there's a strong possibility that the top bidder has complete faith in his market's ability to support a team. And if his own personal fortunes are tied to THAT particular market/real estate development (like a Roski, etc.), then as good as Buffalo is, it might not be enough. My angle on this thread was to postulate what Ralph COULD do within his power to assure the team stays in WNY. Edited October 12, 2011 by BillnutinHouston Link to comment Share on other sites More sharing options...
Thoner7 Posted October 12, 2011 Share Posted October 12, 2011 Ralph should sell Kelly 0.000000000000000000000000000000001% of the team for $1. As a minority owner, Jim would get NO control over anything, and must agree to forfiet his share of the team in the event the team is sold to anyone but Jim Kelly. What Jim's small stake in the team would grant him as part of the deal would be a right of first refusal when the team does go up for sale. Doing this would not discourage other groups from putting in an offer, it would only eliminate Jim and his group of investors from bidding on the team(there is no reason to bid against yourself). This would keep the price of the team high as well. This is the most logical way to give Ralph exactly what he wants and give Jim the best possible chance to buy the team and keep them here. Link to comment Share on other sites More sharing options...
wnyBacker Posted October 12, 2011 Share Posted October 12, 2011 Way to many what-Ifs Link to comment Share on other sites More sharing options...
ICanSleepWhenI'mDead Posted October 12, 2011 Share Posted October 12, 2011 . . . Let's say he says to the County, let's establish a fee for the team breaking the lease, in the event that the franchise relocates. How does, say, $300 million sound? My theory is, if Ralph agrees to a lease-breaking fee that essentially makes future relocation of the franchise cost prohibitive to a new owner, has he not accomplished long term stability of the franchise in WNY from beyond the grave? Doesn't a new owner have to abide by all the terms and conditions of the lease agreement that Ralph signs? * * * * Tell me where my plan is flawed - for example, does the league have jurisdiction over the terms of a stadium lease and therefore the ability to shoot down constructs like this? Etc. When parties to a commercial lease agree in advance to a fee that the tenant must pay if the tenant later breaches the lease, the term for that fee is "liquidated damages." But that's just a fancy legal phrase for exactly the type of fee you suggest. http://www.legalmatch.com/law-library/article/commercial-lease-early-termination-lawyers.html Remedies for Early Termination of a Lease If a commercial lease is terminated before the end of the lease term, the non breaching party may seek damages for the breach. Such damages are often very difficult to measure and the parties to the lease often stipulate to liquidated damages which are a flat sum of money. The lease may also contain an acceleration clause where all other obligations under the entire term of the lease become due upon the other parties breach. Many leases also provide that in a dispute the winning party will be awarded attorney's fees. Unfortunately for us, for reasons beyond the scope of this post, courts place certain limits on the amount of "liquidated damages" that can be enforced later, even if all parties to the lease voluntarily agree to a large dollar figure during negotiations. The amount of liquidated damages that can be enforced isn't a pre-set number - - it depends on what a court determines would have been a reasonable estimate of actual future damages, based on what the negotiating parties knew at the time the deal was struck. http://www.legalmatch.com/law-library/article/liquidated-damages-lawyer.html Enforcement of Liquidated Damages Clauses Courts will often enforce liquidated damages clauses if the damages for breach of the contract will be difficult to estimate. However, a court will not enforce a liquidated damages clause if the clause is unfair or awards an excessive amount of money. Likewise, a court will not award liquidated damages if the contract is based on fraud or mistake. If a court determines that such a clause is unenforceable, the clause is void, and the non-breaching party may sue for other contract remedies. So if Ralph wants to use a liquidated damages clause to make it more likely that a future team owner will keep the team in Buffalo for the full duration of the new lease, the tricky part is picking the dollar figure. Pick a number too low, and the new owner might simply break the lease anyway and pay the pre-determined fee. Pick a number too high, and the courts might decide the liquidated damages clause is void, and refuse to enforce it at all. All of this assumes that Ralph would be willing to sacrifice some portion of the future sales price of the team in order to make it more likely that the Bills would stay in Buffalo for the duration of the lease after he's gone. People have different opinions about how likely that is. Link to comment Share on other sites More sharing options...
Mr. WEO Posted October 12, 2011 Share Posted October 12, 2011 Exactly who would object to a high excape fee? Only the NFL, as far as I can tell. The County would love that high fee, and Ralph won't care. Why would the County "roll over", if the lease contract has the team locked in? As for the new owner, he willingly accepts those terms when buying the team. The next owner may not be bound by that contract. He will of course want to renegotiate---as a contingency for purchase, perhaps. No owner is going to eat such a bad deal as that. What if he wanted to build a new stadium? Link to comment Share on other sites More sharing options...
tennesseeboy Posted October 12, 2011 Share Posted October 12, 2011 some billionare might buy the team and make a bad decision about moving it. In a recession building a fan base might be rather difficult. There are precedents of moves that have not worked, and I'm not hearing of any truly viable market. Certainly LA isn't going to be viable and that's the one we're hearing the most. Link to comment Share on other sites More sharing options...
Billsrhody Posted October 12, 2011 Share Posted October 12, 2011 Everything I've read recently on the new stadium plans in LA cite the Chargers as being the most likely new "LA Team". Somewhat comforting? Link to comment Share on other sites More sharing options...
bowery4 Posted October 12, 2011 Share Posted October 12, 2011 Read some of the stuff in the transcript that Goodell has on BB.com. It infers that the lease is being negotiated already. It also talks about how older stadiums can be of use in today's NFL i.e. GreenBay's (I would also offer up Arrowhead as an example since it is the same age (more or less) as the Ralph and designed by the same firm originally. I really get from the whole thing that RW has a plan and must have a damn good reason for not making it common knowledge to all of us (or maybe he just likes to keep his private business, private) . But mostly I get that the NFL wants us (the Buffalo Bills) to stay a part of it no matter what. I am not really worried about this and really think the posts about it every week or so (and sometimes more) just are a lot of droning on about things we have no control over and actually little to worry about. If I am wrong and they move sometime in the near future, I will quit the board anyway. Link to comment Share on other sites More sharing options...
PromoTheRobot Posted October 12, 2011 Share Posted October 12, 2011 (edited) Agree that Buffalo is a nice market - profitable, but that's primarily because it has no stadium-related debt. However, in a "highest bidder" scenario, there's a strong possibility that the top bidder has complete faith in his market's ability to support a team. And if his own personal fortunes are tied to THAT particular market/real estate development (like a Roski, etc.), then as good as Buffalo is, it might not be enough. My angle on this thread was to postulate what Ralph COULD do within his power to assure the team stays in WNY. Buffalo is not the economic basket case the media paints it as. It has over 9 million people within a 2-hours drive. It has the potential of being the de facto Toronto franchise without having to locate an NFL team outside the country. If the Bills are contenders they can sell out every game. Plus the NFL does seem to value history and tradition, and the Bills in Buffalo are steeped in both. PTR Edited October 12, 2011 by PromoTheRobot Link to comment Share on other sites More sharing options...
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