Panthers sale "not living up to the hype"

[Mr. Scot]

It's been said before that the Panthers sale didn't exactly go according the the NFL's plan.  According to Mike Ozanion of Forbes magazine, while the league ultimately got the owner they wanted, they also learned some things that probably aren't going to make them too happy going forward.

League detractors will probably enjoy this.

Why the sale of the Panthers may not live up to the hype

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Not long ago it was being reported that the football team could go for over $2.5 billion. Indeed, in a podcast Jeff Moorad told me he thought the sale price would be at least $2.75 billion.

In September, we valued the Panthers at $2.3 billion. After our valuations, the NFL signed more lucrative deals withe Amazon, Fox, and Pizza Hut. In other words, the economics of the league are good despite declining television ratings.

Albert Breer said long ago that 2.6 billion was the "tipping point" for the NFL. David Tepper disagreed.  He told the league, "this team is only worth this much, and I won't go higher".  That's where the "drama" that Breer reported came into the sale process.  Tepper initiated a staring contest, and other owners were pissed that he wouldn't up his bid.

But other bidders did go higher.  In fact, nearly everyone was offering more than Tepper.

So what happened?

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Simply put, there are not that many people that have the cash to buy a team worth $2 billion or more because they would need at least $300 million of cash (NFL rules require an incoming owner to own at least 30% of the Panthers and the league has a $350 million debt limit). Most likely, a new owner would need much more than $300 million because it would not be easy to find enough minority investors willing to fund the remainder of the purchase given those investors would have no say in how the Panthers are run.

Rival bidders Michael Rubin has his money tied up in Fanatics, while Ben Navarro wasn't in the cash ballpark, according to sources.

Even though they were willing to bid more, neither Navarro nor Rubin had the liquid cash available (no mention of Kestenbaum, but likely the same story on him).  That's probably why Rubin dropped out of active bidding early despite reports that he was hanging around, probably waiting for the price to come down.

Much to the NFL's chagrin, it did, but still remained at a point where only Tepper actually had the immediately available cash to close the sale.

So what does it mean for future team sales that are on the horizon?

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The rise in team valuations relative to cash-rich buyers is a challenge in other sports too. In the NBA, for example, Tillman Fertitta had to leverage his food and casino businesses to the hilt to buy the Houston Rockets for $2.2 billion in September.

There are billionaires aplenty, but not liquid ones. As a result, sports leagues might relax their controlling ownership requirements.

The NFL was hoping for the Panthers sale to be a benchmark for even higher sale prices down the road (Bloomberg values the Panthers as the 21st most valuable franchise out of 32) but the ultimate sale price failed to reach the level they hoped for because, as mentioned, nobody but Tepper had the cash "in pocket".

So yeah, the league got their desired owner, but not their desired price.

Staring contest over.  Tepper wins.

A while back in the process, the NFL raised the debt limit for potential owners who needed to secure financing for the team.  That's a move which may have helped Ben Navarro and the others, but not enough.  Forbes thinks they might need similar measures to get future sales to go through.

Reality is there just aren't that many billionaires out there, and the ones that do exist aren't all necessarily looking at buying football teams.

And now the NFL is disappointed, and annoyed, and may just have to adjust their future expectations.

[The Pieyed Piper]

"We already own the world, why own a football team? ~some anonymous billionaire

[GRWatcher]

They could've arm wrestled for it. Would've been more exciting.

[Mr. Scot]

4 minutes ago, GRWatcher said:

They could've arm wrestled for it. Would've been more exciting.

From what I've read, Tepper probably would have done it if that were an option.

[Moo Daeng]

So the NFL wasn't forcing Tepper and it was the strength of his finances. That's what I suggested just before the story broke the other day.

Navarro and others couldn't provide a solid enough offer. If they could and it was in the 2.6 range the NFL would have been happy with it.

 

[TheMaulClaw]

I'm obviously very disappointed.  I do want you guys to know in some of the earlier threads about ownership that Mr. Scot started I quoted a source that I met here in Charleston.  He was a legit source, it just didn't go as planned.  I do remember he told me that "no news is good news"....but we've heard news unfortunately.  Just want the board to know that I feel sort of bad about the sale not going as planned to Navarro and I apologize if it appears that I gave false information to the Huddle. 

[Mr. Scot]

7 minutes ago, TheMaulClaw said:

I'm obviously very disappointed.  I do want you guys to know in some of the earlier threads about ownership that Mr. Scot started I quoted a source that I met here in Charleston.  He was a legit source, it just didn't go as planned.  I do remember he told me that "no news is good news"....but we've heard news unfortunately.  Just want the board to know that I feel sort of bad about the sale not going as planned to Navarro and I apologize if it appears that I gave false information to the Huddle. 

I don't see any reason for you to feel bad. 

You told us what you knew at the time, and I believe all of the information you had was legit.  It just didn't pan out the way you, me and others were hoping it would.

There were people falsely claiming to have inside access of course, but I don't believe you were one of them.

[CarolinaNCSU]

Straight cash homie, always wins the day. 

 

Just get it done and let's see what Tepper has got. 

[Mr. Scot]

6 minutes ago, CarolinaNCSU said:

Straight cash homie, always wins the day.

Just get it done and let's see what Tepper has got. 

Expectation is it'll be announced early this week.  All that's left after that is league approval at the owner's meetings.

Pretty sure nobody foresees any issues with that.

[Pejorative Miscreant]

I guess there’s a big difference between a real 2.1 billion stack and a shaky 2.5 billion stack.  

 

Such is life

[top dawg]

Too bad Jim Goodnight wasn't really interested. He would have been a legit challenger. Not that I give a poo about the NFL trying to inflate sale prices, but Goodnight would have been perhaps the best choice in my book.

[!stUp]

1 hour ago, Mr. Scot said:

Expectation is it'll be announced early this week.  All that's left after that is league approval at the owner's meetings.

Pretty sure nobody foresees any issues with that.

May have already been talked about in another thread. But any word on minority investors (Belk's , Levine etc.)?

[Mr. Scot]

8 minutes ago, !stUp said:

May have already been talked about in another thread. But any word on minority investors (Belk's , Levine etc.)?

Not much of anything other than that they'll be making pretty good money from this sale.

Mark Richardson said he'd stay on board for Navarro.  Tepper?  Unknown.

[!stUp]

4 minutes ago, Mr. Scot said:

Not much of anything other than that they'll be making pretty good money from this sale.

Mark Richardson said he'd stay on board for Navarro.  Tepper?  Unknown.

Thanks. Just wondering (And I'm putting the cart before the horse here), on if we'll hear Tepper speak (press conference) this week or after the owners meet next week.