This is how you can buy an NFL team. But you probably can't afford it.
As the sale of the Carolina Panthers nears the finish line, some of Charlotte’s richest families are in for a big payday.
Jerry Richardson owns 48 percent of the team, leaving the other 52 percent to a group of about a dozen wealthy individuals and families from around the region.
The minority partners have little say in the team’s business operations but include some of the most well-known families in the state, including members of the Belk family, who sold their Charlotte-based department store chain in late 2015 for $3 billion, as well as Leon Levine, who founded Family Dollar Stores.
A key question in the deal is whether any of the minority partners will remain investors in the team after the sale, said sources familiar with the process who were not authorized to speak on the record. By doing so, the new majority owner would not need to pay as much cash upfront to buy the team.
“It’s been a great ride, and a benevolent dictatorship (led by Richardson) was the best way to go. If the new boss is somebody that we like ... then we probably will stay in to some extent,” said Charlotte businessman Cameron “Cammie” Harris, a longtime minority owner. His brother, prominent real estate developer Johnny Harris, is also a minority partner.
Cammie Harris said he doesn’t know how many minority owners will stay on with the team after a new owner takes over. “I would think it would be a hard thing to make that decision before you know who the new owner is going to be,” he said.
A Charlotte investment banker who specializes in mergers and acquisitions said it’s not unusual for investors to have an opportunity to roll over their money in such deals.
“It all comes down to the new ownership group and whether they want them, and whether the people that are currently in want their money out, or whether they want to just roll into the new deal and wait to get liquidity at some point in the future,” said the banker, who did not want his name used because he is unfamiliar with specifics of the Panthers' sale.
Keeping some of the investors helps the new buyer because he or she won't have to bring as much cash to the table, the banker said. Depending on the structure, the existing investors may be able to defer any taxes owed on the sale until later, he said.
Another advantage to keeping existing investors is that they have been vetted by the NFL, the banker added.
The NFL says a team can be owned by up to 25 people, one of whom must own at least 30 percent and have full operating control. But the league tends to prefer smaller ownership groups or families, making the sale of a team possible for only the wealthiest individuals, especially as the price tag soars to record highs.
Richardson put the team up for sale in December on the same day Sports Illustrated reported on allegations of workplace misconduct by Richardson. Since then, Allen & Co. has taken bids and worked with the team to select a winner.
The Observer has identified four bidders so far: steel company CEO Alan Kestenbaum; Charleston financial services CEO Ben Navarro; e-commerce entrepreneur Michael Rubin; and hedge fund manager David Tepper. Bloomberg has reported that Rubin dropped out when bids exceeded $2.5 billion, but a source has told the Observer that he remains interested at the right price.
The New York Times has reported that Navarro is believed to have bid $2.6 billion, which would be a record for a U.S. sports franchise. Sources have said Richardson is expected to pick a winner in coming weeks, and a vote by NFL team owners could come at the league’s May 21-23 meeting in Atlanta.
The minority partners
Richardson has said he and the other owners put in about $220 million to start the team, including a $140 million NFL franchise fee. Now the team’s partners are in line to receive a payout based on a deal value in excess of $2 billion.
Here’s a look at the percentage of the team that the partners own, based on documents leaked to Deadspin.com in 2012.
The partners listed are included in the latest Panthers media guide. The percentages have likely changed. That's because the Deadspin numbers put the Richardson family's stake at 47 percent stake and included minority partner Don Keough, who died in 2015.
▪ Jerry and Steve Wordsworth: Rocky Mount brothers whose food distribution business was bought in 2012 by a Berkshire Hathaway subsidiary, about 17.1 percent.
▪ Leon Levine: Family Dollar Stores founder, about 10.4 percent.
▪ Derick Close: Springs Creative Products Group, part of the Springs Industries textile family, about 5.2 percent.
▪ Elliott Close: developer, part of the Springs Industries textile family, about 5.2 percent.
▪ Members of the Belk family: about 5.2 percent.
▪ H.C. “Smoky” Bissell: developer, about 2.5 percent.
▪ Cameron Harris: Charlotte businessman, about 1.3 percent.
▪ Johnny Harris: developer, about 1 percent.
▪ Erskine Bowles: investment banker married to businesswoman Crandall Bowles, who is a member of the Springs textile family, about 1 percent.