So exactly how do you sell an NFL team?
Carolina Panthers owner Jerry Richardson said last month that he is putting the franchise he founded up for sale, and one of the first steps the team announced was the hiring of an investment banker and lawyers to handle the process. The team, however, hasn’t shared much else on how this will work.
Charlotte is packed with investment bankers who help private companies orchestrate sales of their businesses, and they say there is a basic process that bankers follow – although they acknowledge selling one of 32 NFL teams isn’t exactly the same as pitching a family-owned factory.
“It will be a limited universe of people who can buy an NFL team,” said one Charlotte banker who, like others interviewed for this story, did not want to be named because he’s not involved in the deal.
Richardson announced plans to sell shortly after Sports Illustrated reported allegations of workplace misconduct by Richardson during his ownership tenure. The NFL is investigating.
To assist with the sale, the team has hired New York investment bank Allen & Co., a blue-chip firm known for working on sports and media deals to work on the sale. It also has lined up New York law firm Proskauer Rose and Billy Moore, a Charlotte attorney with Moore & Van Allen, to handle legal matters.
The Panthers have said the sale process would not begin until the end of the season, which concluded with a playoff loss Sunday to the New Orleans Saints.
According to five local bankers, here are some of the basic steps the Panthers are likely to follow.
The first step is typically to put together a “teaser,” a one- to two-page document that outlines select details about the team, including basic financial information. The bankers send this out to potential buyers, and those who are interested will be asked to sign a confidentiality agreement. After that, the bank would likely provide a more detailed PowerPoint deck or “pitch book.”
“I think you would want to sell folks on growing Charlotte and why this is an up and coming team,” said one of the bankers.
In the sale of the Panthers, the bankers will likely be approaching high net-worth individuals, rather than the corporations and private equity funds that more traditional businesses seek as buyers. Allen & Co. is known for its ties to the world’s business and media elite.
Potential ownership groups will also likely be making inbound call to the Panthers and their bankers, looking to purchase a rare “trophy” asset. A local group that includes Charlotte businessman Felix Sabates has said it has already hired consultants and is visiting stadiums as it plans a bid.
To be sure, any ownership group that wants to buy the Panthers will have to meet certain NFL criteria. For example, the controlling owner of the team has to hold at least a 30 percent stake and have sole voting power on league matters. An ownership group can have no more than 25 members.
Narrowing down the bidders
In the next step, interested buyers typically submit an “indication of interest” by a certain deadline. This is a letter that describes the buyer’s background and the valuation they put on the company they’re offering to buy.
“We sit down with our client and say, ‘who do you want to meet with?’ and maybe we’ll pick five or six,” said one Charlotte banker said. “Often it’s based on their (price) range. And then we’ll bring them in for management presentations.”
The prospective buyers typically also have access to online “data rooms,” where they can access more information about the company’s revenue streams and other financial information.
Letters of intent
After this due diligence process, the bankers will ask for final bids. These are typically submitted as a “letter of intent,” a proposal that outlines the purchase price as well as other terms.
The banker will work with the seller to pick a winner and then negotiate the final terms, while keeping the other favorites “warm” in case something derails a deal with the preferred buyer. The selected buyer at this point must finalize legal matters and get capital and financing in place.
“It can take three to six months, best case,” one of the bankers said of the whole process. “And it can take longer that that.”
The sale of some family businesses might require regulatory or shareholder approval. In the case of the Panthers, three-fourths of the NFL owners must approve a team sale.
The Panthers “would like to get the highest price, but there has to be an investor group that also can get approved and aligns with pretty strict criteria,” one of the Charlotte bankers said.
The NFL has said it wants the Panthers to stay in Charlotte, but it’s unclear if a new owner would want to try to move the team. Another complication could be whether the buyer wants a new stadium to replace the Panthers’ 22-year-old facility.
The most recent sale of an NFL team, the Buffalo Bills, took a little more than five months and brought a purchase price of $1.4 billion. The Panthers are valued by Forbes at $2.3 billion, but experts have said the team could go for as much as $2.5 billion to $2.8 billion.
While the Panthers will likely follow these basic steps, the sales of high-profile sports properties can take unexpected turns, noted one banker who has been involved in sports-related deals. That can lead to impromptu meetings in hotels or airports and talks with buyers with little experience in the sports industry.
“In a typical sales process, I might say we’re going to meet at such and such office from March 1 to March 15,” said the banker. But in a sports deal, “they might say I want to meet tomorrow. In that kind of process it ends up being a little more fluid and less structured.”