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|12-17-2008, 08:11 AM||#1|
A Son of Martha
Join Date: Oct 2008
Location: Mesa, Arizona
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NFL owners' vote a must-win for Rooney
NFL owners' vote a must-win for Rooney
By By Scott Brown and Carl Prine
Wednesday, December 17, 2008
Thirty-one National Football League franchises today in Dallas will decide the fate of Steelers Chairman Dan Rooney's bid to become principal owner of a team his family has held for 75 years.
The proposed restructuring cleared the league's nine-member finance committee after a nearly five-hour conference call Monday. No vote was taken to recommend the package to the members, and the buyout tender remains a "work in progress," according to Indianapolis Colts owner Jim Irsay, a committee member and respected financial mind throughout the league.
"The sentiment was to bring it to Dallas and put it before all the owners," said Irsay, 49, who considers Rooney, 76, "a father of this league and a torch bearer for all of us."
Irsay confirmed broad but shifting terms of the deal: Rooney pared an original $280 million in debt down to $250 million. PNC Financial Services orchestrated financing, which will require holding the team as collateral. About $212 million to $262 million worth of Steelers stock is being assigned to potential partners.
Irsay did not know personally any of the partners. He felt confident Dan and his son, Steelers President Art Rooney II, will make a strong case to other owners during the session slated to start at 1 p.m.
The Rooneys need 24 votes to take control of the team. Together, they plan to hold 30 percent of the franchise stock.
The debt ceiling for NFL clubs is $150 million each, according to league spokesman Greg Aiello. If approved, the $250 million debt load would represent about one-third of the franchise's $800 million valuation. That's triple the debt held by the franchise and requires a special waiver by the owners, according to Rooney's brothers.
Last year, the NFL allowed the New York Jets and Giants to borrow more than $700 million to build a shared stadium. The waiver came with assurances by both franchises that they would recoup the credit costs with revenue. The franchises later announced sales of special seat licenses for the stadium to cover much of the debt.
The NFL front office laid off 10 percent of its work force last week because of the recession. Rooney assured the finance committee that plans are in place to tackle tough times and potential labor strife, including a season-ending lockout. The contract with the National Football League Players Association ends after the 2010 season.
"It's definitely workable. We've had teams with similar levels of debt. It varies by team. There are challenges, no question about that. But Dan Rooney and his son can manage it. They believe they can keep the Steelers franchise competitive, like it has always been," Irsay said.
Irsay said fans should realize ticket prices might rise in order to pay the increased debt, but he believes any hike would be "very minor." The payoff: The Steelers would remain in a family with lasting, durable ties to Pittsburgh.
"Dan Rooney and the Steelers have shown us the discipline and a track record of success on and off the field. That means something," Irsay said.
Rooney declined to comment.
The NFL has sought to prod the five sons of the late Art Rooney Sr. to divest from their increasingly lucrative casinos in Florida and New York or sell their stakes in the Steelers -- preferably to Dan Rooney, who followed his father into the Pro Football Hall of Fame. Each brother owns a 16 percent share of the club, and the related McGinley clan owns 20 percent.
Two brothers -- Art Jr. and John Rooney -- will sell some shares and remain minority partners. Art Jr. decided while recently trimming his Christmas tree that he'll take $75 million upfront, to go into a trust for family and charity. About half of the remaining $45 million worth of shares will be slowly sold back to brother Dan's ownership group. The rest goes to his offspring, as long as the Rooneys own the club.
"It was strictly emotional on my part. I was decorating the Christmas tree and I was thinking, 'I am going to leave part of the Steelers to my grandchildren and their children.' That's why I did this. The spirit of 'The Chief' will live on," Art Jr. said.
The Colts' Irsay applauded Art Jr. and the other brothers for agreeing to concessions on the team's price tag in order to make the deal work. A previous $840 million cash tender by New York hedge fund billionaire Stanley Druckenmiller collapsed in September, just before global financial markets dropped.
"These guys worked it out, which is incredibly impressive. They had differences, sure, but they worked them out. They figured out a way to make this work for everyone in the family, the community of Pittsburgh, the fans and the league. They didn't think of themselves first. It was a tough situation, and a lot of money was at stake," said Irsay.
Since 1999, the Colts have been the winningest team in the NFL and, next to the publicly owned Green Bay Packers, boast the lowest debt load of any franchise. Irsay considers Dan Rooney a role model.
"The Steelers' business model has been one of the most successful in the league. Dan Rooney has been at the head of that, and his son has been a tremendous president," he said. "The Steelers' brand name is famous. We want that to continue."
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