SBJ/May 26-June 1, 2014/Leagues and Governing Bodies

League considers changes to ownership percentage

As part of a broad look at succession planning, the NFL is considering lowering the minimum percentage of a team that a control partner has to own under the league’s equity rules.

Any change, if made, would pertain only to teams owned more than 10 years and would be done as part of an effort to keep a club in its ownership family, said Bob McNair, Houston Texans owner and chairman of the NFL finance committee.

“We are doing a lot of work on succession planning,” McNair said. “We are concerned. We want to see the teams stay in the families.”

At issue, McNair said, are estate taxes, which can range between 40 percent and 55 percent, depending on a team’s home state. Those percentages can make it hard for a team’s heirs to pay the necessary taxes while also keeping enough of the team to satisfy ownership requirements. Currently, for teams owned more than 10 years, a family must own at least 30 percent, and the control partner most hold 10 percent.

Photo by: GETTY IMAGES
“We will continue to look at those numbers as the values of franchises go up,” McNair said. “A smaller percentage is still significant. The main thing is, we want [them] to have skin in the game.”

In addition to considering lowering the equity threshold for heirs, McNair said the committee is looking closely at estate planning and trust mechanisms for recommendation.

The league’s finance committee is not, however, looking at raising the current $200 million debt cap on teams, largely because so many clubs are not even borrowing to that limit, McNair said. That means the now nearly 3-year-old collective-bargaining agreement is working, he added. “Even the teams in the lowest quartile are doing much better,” McNair said. “It is a healthier environment for the whole league.”

McNair a few years ago was one of the owners to talk publicly about what he called the “smoothing” of the salary cap after the 10-year labor pact was agreed to in 2011. The cap rose little from 2011 to 2013 but then jumped $10 million, to $133 million, for 2014 and is expected to rise as much as $15 million for 2015.

But that, McNair predicted, will end the big jumps. He ascribes this year’s increase largely to the new CBS Thursday night package and its new revenue for the league, and he attributes the increase for next year to the start of the new TV contracts. “I don’t think there are going to be big jumps [after that],” he said. “Our TV partners try to have some consistency so they won’t have big jumps. We are all interested in seeing a more consistent, more predictable [salary cap].”

The TV contracts after the big jump at their start, McNair said, rise only gradually thereafter.

McNair missed the league’s annual meeting in March, recuperating from skin cancer treatment. He looked healthy here and said he was in remission and that it was great to be back at an owners meeting.

STADIUM GAMES: The owners approved stadium financing for the Miami Dolphins, paving the way for the end of their stadium troubles. The Dolphins presented to the owners on their plans to get a cut of the tax revenue generated by events brought to a renovated SunLife Stadium. Those talks with the local government are ongoing and replace failed quests for direct state funding and a waiver of paying real estate taxes.

Beyond those considerations, Dolphins owner Stephen Ross is ready to privately finance the $400 million renovation. Some of that will come from the league’s stadium financing capacity, though.

What’s worth watching is how well a renovated SunLife Stadium does in the Super Bowl bidding process if it gets back into the mix. The award last week of the game in 2018 to Minneapolis is a clear sign the league continues to reward cities where stadiums are funded with a healthy share of public money. In the case of Minnesota, that’s about half of the cost of the Vikings’ planned new $1 billion stadium.

Minneapolis bid chairwoman Marilyn Carlson Nelson, with Vikings owners Zygi and Mark Wilf, said landing the 2018 Super Bowl was an affirmation of the North. 
Photo by: AP IMAGES

Should Miami pursue the 2019 game, it is likely to find Atlanta as a competitor. The Falcons last week broke ground on their new stadium, and the team is getting $200 million of public funds for that effort.

As for Minneapolis, the Minnesota contingent at the meeting won the game over groups from favorite New Orleans, which will be celebrating is 300th anniversary in 2018, and Indianapolis, which won wise praise for its hosting of the game in 2012. Minnesota’s bid committee made a presentation that included plans for an eight-story ice palace in St. Paul. Bid chairwoman Marilyn Carlson Nelson said the win was an affirmation of the North, and that, “We really like a party with a purpose.” The bid committee promised that the 2018 Super Bowl week would help raise money for various charitable endeavors.

LAMPING TALKS JAGS, FULHAM: Local revenue is trending higher for the Jacksonville Jaguars, said Mark Lamping, the team’s president. Long one of the lowest revenue teams in the league, enthusiasm has been high around the team recently. The Jaguars were active in free agency this year and surprised many experts by picking quarterback Blake Bortles with the No. 3 overall pick in this month’s draft. Perhaps in part because of the fans’ familiarity with Bortles, who played his college ball at Central Florida, the Jaguars enjoyed record attendance of more than 6,000 fans at their recent rookie training camp.

Separately, Lamping is a board member of Fulham FC, which is owned by Jaguars owner Shad Khan. Fulham was relegated from the EPL by finishing in the last three of the league this year, but Lamping expressed confidence that focus on the field and a more solid business plan would lead to promotion.

Vincent
DEVELOPING PLANS: Troy Vincent, the NFL’s executive vice president of football operations, spoke to the owners about the idea of a developmental league. He said prior to his presentation that there are no concrete plans for such a league, adding that the idea is not tied to the heightened, critical focus on the NCAA model. But he also said he would like to get input from fans on how they feel about the idea of a new league. The NFL has not had a development league since it closed NFL Europe in 2007.

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