This is how you can buy an NFL team. But you probably can't afford it.
Multiple deep-pocketed individuals are being mentioned as potential bidders for the Carolina Panthers, put up for sale in January by longtime owner and founder Jerry Richardson.
That could be good news for Richardson, who owns 48 percent of the franchise, and his minority partners.
The Panthers could sell for between $2.3 billion-$2.8 billion, experts say. And even the appearance of more credible bidders, some of whom the Observer has been able to verify, could mean a difference of a half-billion dollars in the value of the team.
That’s “billion” with a “b.”
And some Panthers minority owners, according to a source familiar with the process, are “hoping for it to be a nice bidding war.”
Having multiple offers on the table, according to Marc Ganis, a Chicago-based sports business consultant, is in Richardson’s best interest – but “only if they are credible bidders with cash and the ability to close.”
Viable names reported so far include billionaires David Tepper (by NFL Network) and Frank and Lorenzo Fertitta (by CBS’ Jason La Canfora), Ben Navarro and a group that includes Charlotte businessman Felix Sabates.
The Observer has confirmed Navarro’s interest. Multiple sources offered contradictory reports on the Fertittas’ interest, and a potential bid from Tepper could not be confirmed.
Under NFL rules, a team can be owned by up to 25 people, one of whom must own 30 percent of the team and put that sum down up front (in this case, $690 million or more). That owner must maintain operating control of the organization and can maintain a debt ceiling of no more than $250 million, which can be used for team-related expenditures.
“When it comes to a sale, the greater the demonstrated interest from qualified candidates the better,” said David Carter, executive director of the University of Southern California’s Marshall Sports Business Institute. “Often, as the likely sale price increases due to market demand, bidding groups merge, consolidate or drop out.”
Carter added that it is normal to see a handful of names – confirmed or not – pop up early in the bidding process. Those individuals are usually rich or have a connection to the region – and ideally both, Carter said.
Navarro, a low-profile South Carolinian and founder and CEO of debt collection firm Sherman Financial, is both. The Observer reported his interest in buying the franchise last week.
“You’d have to take (Navarro) seriously,” said Ganis, who has known Richardson for over two decades. “He has the personality (and) the personal profile.”
Tepper is a hedge fund manager who owns 5 percent of the Pittsburgh Steelers. The NFL Network called Tepper “a frontrunner” to buy the team, a claim the Observer could not confirm. Tepper could not be reached.
The Fertitta brothers, who sold their shares of the Ultimate Fighting Championship mixed martial arts promotion for a reported 2,000 percent profit in 2016, run a private investment firm, Fertitta Capital.
But it’s unclear whether they will become players in the process. A source told the Observer on Friday that the reports “were real,” but sources said this week that the Fertittas are not interested in making an offer for the team at this time. The Fertittas could not be reached.
Here’s a quick look at the reported potential bidders:
Tepper, 60, is the founder and president of Appaloosa Management, a global hedge fund firm based in Miami Beach.
According to a New York Magazine profile written about him in 2010, Tepper began moving up the ladder at Goldman Sachs in New York in the 1980s and was a head trader when the market crashed in 1989. He founded Appaloosa in 1993.
Tepper’s Appaloosa offices were described by the profile as resembling a “high-end sports bar,” full of Steelers paraphernalia, with mostly male employees and even a large decorative pair of brass male genitalia on his desk. These were reportedly a gift from a former employee who was impressed with a 148-percent climb in Appaloosa stock in 2003, when Tepper took a risk and “purchased the distressed debt of the three then-largest bankruptcies in corporate history: Enron, WorldCom, and insurance giant Conseco.”
That atmosphere could raise eyebrows given the nature of the NFL’s ongoing investigation into sexual and racial workplace misconduct alleged against Richardson in a December report from Sports Illustrated. Richardson announced the evening the report was released that he would put the team up for sale, but has not commented on the allegations or the investigation.
A Pittsburgh native, Tepper would have to sell his share of the Steelers if he were to purchase the Panthers, according to NFL rules. But because he already is a minority owner of an NFL team, he has been through the league’s vetting process required for ownership.
In 2016, Frank, 55, and Lorenzo, 49, sold Ultimate Fighting Championship (UFC) to WME|IMG, Silver Lake Partners and KKR, a global investment firm, for an estimated $4 billion, according to Forbes.
The brothers sold their remaining stakes in UFC for $5 billion last August. Also in 2016, the brothers sold Fertitta Entertainment Inc., a gaming and leisure management company, as part of the initial public offering of casino operator Red Rock Resorts.
La Canfora initially reported the Fertittas’ interest, said that they would have to divest their holdings in Station Casinos were they to seriously consider an NFL bid. The NFL did not immediately respond to questions about a potential sports-betting conflict.
The Raiders are in the process of moving to Las Vegas. Patriots owner Robert Kraft reportedly has several casino-related holdings.
Last year, the Fertittas launched Fertitta Capital with $500 million of their own seed money, according to a press release from the firm.
Professional sports ties in the Fertitta family extend beyond brothers Frank and Lorenzo. Last year their cousin, Tilman Fertitta, bought the Houston Rockets for $2.2 billion. According to Forbes, Tilman Fertitta has a net worth of $4.4 billion.
Navarro was confirmed by sources as an interested bidder last week.
A former Citigroup executive, Navarro was linked to the sale on Dec. 24 by NFL Network reporter Ian Rapoport, who said that Navarro, 54, is “among those who have planned to purchase an available team.”
In 1997, Navarro founded Sherman Financial. The firm buys and manages unpaid consumer debt, often in the form of credit card debt, in the U.S. and abroad. Navarro remains its CEO.
In 2014, the company settled a case with the state of New York “for repeatedly bringing improper debt collection actions against New York consumers.” Sherman and another debt collector filed suits against consumers based on claims that were beyond the legal time limit for their enforcement, the state Attorney General said. As part of the settlement, Sherman Financial was required to pay a $175,000 penalty and improve its debt collection practices.
Navarro appears to keep a low public profile, but his main charitable venture is well-known in South Carolina. He privately funds Meeting Street Schools, a nonprofit educational venture in the state that opened a public school under private management in a low-income part of North Charleston in 2014.
The Panthers would be Navarro’s first foray into professional sports. He is the son of former college football coach Frank Navarro, who coached teams including Princeton and Columbia.
The Felix Sabates group
Sabates, a Charlotte businessman, has told the Observer he is part of a group, including Panthers minority owners and NASCAR drivers, who are considering a bid. He has said he would not be the majority owner by a “long shot” but has not disclosed any other names in the group.
A longtime fixture on the local sports and racing scene, Sabates declined to comment last week about the ownership group. He previously has said he has had discussions with Marcus Smith, the CEO of Concord-based Speedway Motorsports, about joining his group but it’s not clear if the Smith family is involved.
Last week, a source who declined to be identified because the bid is not public, told the Observer the current and former NASCAR drivers interested in joining the Sabates group include Jimmie Johnson, Kyle Busch, Jeff Gordon and Dale Earnhardt Jr. The source also said Chip Ganassi, a team owner who is a business partner with Sabates, also is interested, as well as musician Kid Rock.
It is unclear whether the Sabates group has a member wealthy enough to meet the NFL’s 30-percent threshold.
League meetings are approaching
Meanwhile, the NFL’s league meetings, a time when other team owners might approve a sale, are drawing closer.
The league’s annual meeting takes place from March 25-28 in Orlando. There is also a spring league meeting in Atlanta from May 21-23.
Three-fourths of the NFL’s 32 owners must approve the sale of the Panthers, once the organization submits a name for ownership.
Staff writers Joseph Person and Rick Rothacker contributed.