What Does It Take to Be the Owner of an NFL Franchise?
As hobbies go, there aren't many more expensive than owning an NFL team.
Of course, for some owners, it's much more than a hobby. Some teams have been in the hands of the same family for decades, purchased many years ago for amounts so paltry that it makes their current value all the more staggering.
However, for owners that purchased their teams more recently, such as Jimmy Haslam of the Cleveland Browns, the investment is enormous.
That made it all the more surprising last week when The Wall Street Journal (via Terry Pluto of The Plain Dealer) reported that Haslam's Pilot Flying J company, which operates gas stations and truck stops across America, has a staggering $4 billion in debt.
How does a guy whose company has $4 billion in debt afford an NFL team? What exactly does it take to own an NFL team?
Well, to start with, it takes somewhere between 100 bucks and over a billion dollars, depending on when you bought the team.
As the chart above demonstrates, if you're one of the NFL's "new school" owners, such as Haslam or Stephen Ross of the Miami Dolphins, you're going to be writing an enormous check if you want to own an NFL team.
In fact, the $700 million that was the "first payment" made by Haslam is part of the problem at Pilot Flying J, according to The Wall Street Journal:
The company's debt nearly doubled to $4 billion in a two-year period through last year, as its owners paid themselves two payments totaling $1.7 billion from it, according to Moody's.
Last year, Pilot issued $1.1 billion of the debt -- largely to fund the second one, a dividend for $700 million, according to S&P. That was partly so Jimmy could buy the Cleveland Browns.
Those astronomical figures contrast starkly to the amounts paid for the NFL's least expensive teams.
The Halas family paid all of $100 to establish the Chicago Bears (then the Decatur Staleys) in 1920. It cost the Mara family $500 to found the New York Giants five years later. The Green Bay Packers were founded by the community and have never had a "sale price."
Granted, $500 was a lot of money in 1925, but it wasn't $750 million. Once upon a time, if you were a man with a crazy dream and $25,000, you could be the owner of the Kansas City Chiefs or the Buffalo Bills.
Take a look what the aforementioned 10 teams are now worth, according to Forbes, and suddenly, that dream doesn't appear to be so crazy.
The last three teams to be sold have barely "broken even," but for those who have owned their clubs for decades, owning an NFL team has been better than winning the lottery.
In short, as hobbies go, owning an NFL team is a pretty good investment. Very rarely does the value of a team go down. Get a shiny new stadium and that value can skyrocket. Every team in the NFL will get a nice boost in the bottom line when the new TV deal kicks in come 2014.
Nowadays, you have to be filthy rich to buy an NFL team. However, there are a few families in America, such as the Rooneys and Al Davis' clan in Oakland, that became filthy rich by owning an NFL team.
Granted, many of the owners and families on this list from Forbes and Celebrity Net Worth made their money elsewhere before buying an NFL team. Others still, such as the Rooneys, own only a part (albeit controlling interest) in a team.
It's a testament to how the popularity of the NFL has exploded over the years and what ownership of an NFL team can do for the old checking account.
For those of you looking to win a bar bet with your knowledge of NFL trivia, Paul Allen is the NFL's wealthiest owner, with an estimated net worth of $15 billion. He bought the Seattle Seahawks in 1997 with $194 million he found in the cushions of his sofa.
It's not all about the money, though. You have to know the secret handshake.
OK, there's not really a secret handshake. Probably.
There are, however, a number of hoops that a prospective owner has to jump through in order for the sale of a team to be approved by the league, as well as requirements any NFL team's owner must meet.
The NFL makes potential owners meet quite a few more of these requirements than any of the other major sports. For example, any group looking to buy an NFL team must be led by a single individual who owns at least 30 percent of the team, although a family member can account for one-third of that stake.
The reason for that is to prevent large ownership groups, such as the one that recently bought the Los Angeles Dodgers for an eye-popping $2 billion-plus, from buying a team. The NFL wants each franchise led by a single "face," and the NFL gets what it wants.
The Green Bay Packers are the lone exception. Their "communal" ownership predates NFL rules and is unique not only in the NFL, but in all major American professional sports. The world-famous soccer club FC Barcelona of La Liga is owned in a similar fashion by fans of the team.
However, as Daniel Kaplan of SportsBusiness Journal reported back in 2009, the NFL recently amended those rules to allow teams owned by the same person or family for more than a decade to be "led" by an owner who needs hold only a 10 percent stake in the team.
The change was spurred by the Rooney family's struggles in maintaining ownership of the Pittsburgh Steelers and is intended to help family-owned teams with estate planning.
That's far from the only hurdle potential owners must leap.
Ownership in any gambling interests is a big no-no, so casino owners need not apply.
The NFL also has prohibited cross-ownership of majority interest in teams in other major American sports. Some owners, such as Stan Kroenke of the St. Louis Rams and Malcolm Glazer of the Tampa Bay Buccaneers, own teams in the English Premier League, but Kroenke was forced to cede control of the Colorado Avalanche (NHL) and Denver Nuggets (NBA) to his son when he took over the Rams in 2010.
However, that rule was also tweaked back in 1997. Now, an NFL owner can own teams in other sports if those teams are in the same city as the NFL franchise they own or in a city where there is no NFL team. Allen, for example, also owns the Portland Trail Blazers.
Any prospective change in ownership must also be approved by a league vote, and that's where things can get nebulous. Basically, a new owner is petitioning 31 other individuals for inclusion into one of the world's most exclusive clubs.
If they think you're going to embarrass them or be a huge pain in the...wallet, then odds are you aren't getting in.
It's why Rush Limbaugh's one-time interest in the Rams never had a chance. It's also why Mark Cuban probably wouldn't either.
Cuban might get in, if only for his business acumen. Jerry Jones of the Dallas Cowboys and Daniel Snyder of the Washington Redskins have rubbed their fellow owners the wrong way at times, but they've also made the NFL buckets and buckets of money.
Those buckets have a tendency to smooth over disagreements pretty quickly.
That's what makes the Haslam situation a curious one. One would assume that the NFL did quite a bit of due diligence regarding Haslam before green-lighting his purchase of the Browns.
However, since he took over ownership duties, Pilot Flying J has been the subject of a federal investigation that claims the company defrauded thousands of its customers. Now comes the report that the corporation is drowning in red ink.
That is not the kind of attention the NFL (or its owners) likes.
If this sort of thing continues, or Haslam is indicted for fraud, then the NFL could step in and force him to relinquish control of the team. It's a rarity in the NFL, but not without precedent.
In the 1990s, the NFL forced San Francisco 49ers owner Ed DeBartolo Jr. to give up control of the team for one year after he was implicated in a scandal involving Louisiana governor Edwin Edwards. When legal issues continued to be a problem for DeBartolo, he ceded control of the team permanently to his sister in 2000.
It's too early to presume, though, that Haslam will be forced into a similar situation. His membership hasn't gotten off to the best of starts, but for now he's still a member of the club.
After all, Haslam jumped through the hoops, ponied up the membership fees (even if it appears that Flying J footed the bill) and fulfilled all the requirements.
Even if he doesn't have his own aircraft carrier.
What is the duplicate article?
Why is this article offensive?
Where is this article plagiarized from?
Why is this article poorly edited?