Cameron Fleming # 73 of the Denver Broncos runs onto the field before a game against the Kansas City Chiefs at Empower Field at Mile High on January 8, 2022 in Denver, Colorado.
Dustin Bradford | Getty Images
The first bids are within the Denver Broncos sales process, and the investigation is ongoing. The NFL franchise could sell for $ 4 billion, which may be the most expensive transaction in league history.
Former Walmart chairman and Walton family heiress Rob Walton, who is worth about $ 68 billion, is considered a strong candidate to buy the team. NBA and NHL owners Josh Harris and David Blitzer, who both hold minority stakes in the Pittsburgh Steelers, are also interested, according to people familiar with the sale.
Even a decentralized autonomous organization, or DAO, consisting of crypto enthusiasts is interested and raises money to cover the costs.
Sales would be large by any standard in sports. The Broncos are owned by the Pat Bowlen Trust and are valued at $ 3.7 billion, according to Forbes. It’s number 10 in the NFL. If the team is sold at the expected price of $ 4 billion, it will obscure Alibaba co-founder Joe Tsai’s $ 2.3 billion purchase of the NBA’s Brooklyn Nets in 2019. Hedge fund manager David Tepper bought the NFL’s Carolina Panthers for $ 2.2 billion in 2018.
Elsewhere, Los Angeles Dodgers and Lakers co-owners Todd Boehly and British billionaire Jim Ratcliffe are vying for ownership of English football club Chelsea FC. Last week, Boehly was approved to enter into exclusive negotiations to buy the club from Russian billionaire Roman Abramovich, according to The Wall Street Journal. But INEOS, the chemical company chaired by Ratcliffe, issued a statement saying he is offering more than $ 5 billion for the club.
Sports bankers estimate that the auction for the Broncos may bring a new record for the NFL. Team assessments are often inflated and predominantly hypothetical – apart from formal and public sales. Pundits use multiples of revenue and add operating revenue, adjusted for revenue sharing, and all other assets associated with the club, which may include real estate to reach a figure.
The sale could end up hitting between $ 4 billion, noting the city of Denver’s young demographics with its “technology, natural resources and tourism,” said Marc Ganis, CEO of consulting firm SportsCorp. “It’s not a single industry that’s something you look for when buying a sports franchise.”
Although the bidders are not publicly known, Ganis is familiar with the sales process and who is considering buying the Broncos. He said interested parties are “strong, very successful business people” who are “serious about buying the team.”
Inside the Broncos outlet
The Broncos were officially brought to market in February after years of legal disputes, including a family case in 2019. A month before the team went on sale, a Denver judge ruled in favor of the Broncos and annulled a right of first refusal issue. with ROFR Holdings Ltd. – the company established by the former team owner Edgar Kaiser. He sold a majority stake in the Broncos to Pat Bowlen in 1984 for a reported $ 78 million.
Under Bowl ownership, the Broncos made seven Super Bowls and won three championships. He died in 2019 and bequeathed his approximately 78% stake in the team to the Pat Bowlen Trust.
Javonte Williams # 33 of the Denver Broncos carries the ball against the Cincinnati Bengals at Empower Field At Mile High on December 19, 2021 in Denver, Colorado.
Matthew Stockman | Getty Images
Ganis said the town offers a “location premium” as the area attracts wealthy people who like to ski. “Never underestimate the value of having a team in a place that is either a very fast flight or a place that you would take to anyway,” he said.
Should the Bowlen family secure $ 4 billion or more, it would likely increase the values of other NFL teams. Denver-based NBCUniversal affiliate KUSA reported that Bowlen’s seven children would share 78% of the final prize. That equates to more than $ 400 million each.
Broncos CEO Joe Ellis said the team hopes to have a new owner in place by the 2022 NFL season. At the NFL’s annual meetings in March, Ellis is quoted by the Denver Post as saying that there is a “significant amount of interest from a number of highly qualified bidders.”
The Broncos and investment firm Allen and Company did not immediately return a CNBC request to discuss the transaction.
Beth Hall | Bloomberg | Getty Images
What would Walton add?
Last month, the New York Post reported that Walton would make a bid. Walton is linked to Los Angeles Rams owner Stan Kroenke, who married his cousin Ann Walton Kroenke. Ganis said Walton becoming an owner would be “great validation” for the NFL’s business model.
“These are people who can buy anything they want, and this is where they choose to put their money,” Ganis said. “It’s a confirmation that it’s a good business for top business people to be in.”
Although inflation is high, investors are still interested in buying sports franchises, said economist Judd Cramer. He called owning a professional team a “real asset” because clubs traditionally increase value annually.
And inflation increases “the cost of having money not invested in real assets,” said Cramer, who served in former President Barack Obama’s administration.
Robert Smith, Vista Equity Partners, Founder, Chairman and CEO
Adam Galica | CNBC
A black NFL owner remains intangible
Vista Equity Partners CEO Robert F. Smith was speculated to be a bidder on the Broncos. He has a net worth of $ 8.9 billion, according to Bloomberg. But Smith, who is a native of Colorado, is adamant that he is not interested.
In a statement to CNBC, Vista Partners said: “Robert’s priorities right now are the fight for voting rights and economic justice rather than being a black owner of a team. He remains most focused on how he can best help underserved communities gain access. to capital, health care, education and the ballot box. Pursuing ownership of the Broncos is not on his radar. “
The NFL is looking for a black owner – that was made clear at this year’s Super Bowl in Los Angeles. NFL Commissioner Roger Goodell noted that he is “personally involved” in attracting more minority candidates for NFL ownership, as the league has never had a black owner in its over 100-year history. Goodell noted that the NFL met with media mogul Byron Allen to buy an NFL team. However, it is not clear where it stands.
The NFL Finance Committee, chaired by Kansas City Chiefs owner Clark Hunt, will decide to put a select bidder to the vote. A candidate must have at least 24 votes from 32 NFL team owners.
The NFL declined to comment.
Russell Wilson # 3 of the Seattle Seahawks at the 2019 NFL Pro Bowl
Mark Brown | Getty Images Sport | Getty Images
What does a new owner get?
A new ownership group may be heading into a playoff contender.
In March, the Broncos traded for Seattle Seahawks quarterback Russell Wilson. Before that, Denver hired a new head coach in Nathaniel Hackett – the former offensive coordinator for the Green Bay Packers.
On the business front, the Broncos have earned over $ 400 million in annual revenue since 2017, according to Forbes. This is primarily due to the NFL’s media revenue sharing. The NFL pays teams more than $ 300 million each year from their national revenue.
And that number was set to rise when the NFL agreed to a new $ 100 billion media rights deal in March 2021. Its Sunday Ticket media rights are on the market for more than $ 2 billion annually, and the NFL increased annual sponsorship money to $ 2 billion.
However, the new Broncos owner will have to invest in the team’s playing side.
Built in 2001, Empower Field at Mile High cost $ 400 million and accommodates about 76,000 people for NFL games. Ganis said the complex could use “significant upgrades” as it is not updated compared to newer NFL stadiums.