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SBJ/January 8 - 14, 2007/This Weeks News
NFL looks at Bears’ structure
Published January 8, 2007
The NFL is examining the Chicago Bears’ ownership structure to determine how the club would remain family controlled beyond the life of the team’s longtime matriarch, Virginia McCaskey, while still fulfilling league regulations.
|The Bears are already owned by the Halas
grandchildren, but all own small shares.
There are no indications the 82-year-old McCaskey is in ill health, but the league’s rules have changed significantly since 1983, when McCaskey’s father, George Halas, died and left the team to his grandchildren, with full voting rights residing with his daughter.
The league now requires a single individual to own at least 20 percent of a club, so if the 11 grandchildren with ownership stakes were to assume voting control, one may need to buy out some of the others to reach the league threshold.
“It is still in the discussion phase,” Tom Benson, New Orleans Saints owner and chairman of the NFL’s finance committee, said of his group’s examination of the Bears during a break in a league meeting last month in Frisco, Texas. “Everyone wants to help the McCaskey family.”
Bob McNair, the Houston Texans’ owner and a finance committee member, commenting on the situation during a break at a previous owners meeting, said, “Rules are rules,” indicating he does not believe the league should bend the ownership restrictions, if so asked, for the McCaskey clan.
The Bears maintain there is no issue to consider.
“All contingencies have been considered and provided for, and the family will continue to maintain ownership,” a Bears spokesman said last week. The spokesman declined to provide details and said the NFL review was a normal, course-of-business matter for the league.
NFL spokesman Brian McCarthy, commenting on whether the Bears ownership would conform with league rules upon McCaskey’s death, said, “The league would review that.”
Passing a team on to heirs has created complications in the NFL before. Miami Dolphins owner Joe Robbie’s 1990 death ultimately led to the team’s sale to Wayne Huizenga because the Robbie family could not afford the $47 million tax bill. John Kent Cooke failed in his quest to buy the Washington Redskins from his father’s estate in 1997, ultimately losing out to current owner Daniel Snyder.
In addition to the Bears, there are a host of NFL clubs controlled by elderly owners, including the Buffalo Bills, Oakland Raiders and Tennessee Titans. The issue for most teams is estate taxes, but that is not the case with the Bears because the Halas grandchildren already own the club. Rather, the problem is the league general partner rule, which was not in place when the trust was created by Halas in 1981 and when few would have envisioned how expensive even a small stake in an NFL team would become.
Halas’ will is sealed in Cook County probate court, but according to the Chicago Tribune’s 1987 coverage of a lawsuit brought by two of Halas’ grandchildren, each of the grandchildren had received 3.8 percent of the club.
“Issues related to succession have always been of significant concerns within the NFL because of its unique rules regarding ownership and because of the greatly increased values of franchises,” said Marc Ganis, a Chicago-based sports consultant.
NFL rules require a single individual to own at least 30 percent of a club. However, Benson said for long-standing, family-owned teams, the figure is 20 percent.
The most obvious candidate among Halas’ grandchildren to take the ownership role is Michael McCaskey, chairman of the club and Virginia’s son. He currently represents the team at league meetings and has been the person in discussions with the NFL finance committee.
It could not be determined how long the finance committee has been looking at the Bears.
Much of Michael McCaskey’s wealth is believed to be tied into his share of the team, however, so whether he would have the means to buy out his relatives is unclear. He would be constrained from borrowing against the team by NFL debt regulations.
While owners Benson and McNair were responding to questions related to McCaskey approaching the committee about the Bears ownership structure, the team insisted it was the NFL that first asked McCaskey to clarify the succession plan.
The Bears spokesman said McCaskey made no request for the league to bend any rules on his behalf.
Benson said McCaskey raised the issue of borrowing beyond the debt limits.
Other than the McCaskeys, eight of whom, including Virginia, are executives with the team, the next logical successor to the Bears would be either Andrew McKenna or Pat Ryan. The two Chicago businessmen bought 20 percent of the team in 1990.