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Volume 21 No. 1

In Depth

The 25-year-old, dyed-in-the-wool Pittsburgh Steelers fan couldn’t believe his eyes. Bill Cowher angrily stormed toward him, approaching on the grounds of the old Municipal Stadium in Cleveland, his trademark spittle flying.

Don Cornwell, a young staffer at the NFL in 1994, had gotten the short end of the stick one fall weekend to fly in from New York to enforce league uniform rules before that day’s Browns-Steelers dustup. He had just informed Steelers staff that Greg Lloyd, a recidivist fashion rule breaker, had his socks too high. That meant Lloyd returning to the locker room to change, which could have caused the linebacker to miss the start of the game. Cowher would have none of it.

“He runs over and starts screaming at me and spit is flying out on me,” Cornwell, now 43, recalls laughing. “I am just standing there taking it, meanwhile I am really excited. Bill Cowher is actually yelling at me!”

Cornwell, who remained such a big fan of the Steelers that several years ago he went to their fantasy camp, moved on from his sock inspection days (he was an analyst with the league for two years). He is now a managing director at Morgan Stanley where he is one of the top dealmakers in sports, overseeing the sales of IMG (pending) and Maple Leaf Sport & Entertainment, and yes, the restructuring of the Steelers.

He is rare in sports, a top acquisitions adviser at a major investment bank. Unlike traditional commercial sectors, in sports, boutique agencies play an outsized role in mergers and acquisitions, or M&A. The sale of the Sacramento Kings, the biggest team sale last year, for example, engaged three boutiques: Game Plan advising the buyer, GSP the seller, and Tipping Point Sports the spurned Seattle group.

Part of the reason for the lower profile of big investment banks is the unique and heavily nuanced aspects of the sports industry, and in particular the leagues’ heavily regulated approach to their business. It’s also the slower deal flow, and for Wall Street, the often small numbers.

Of course, with the $2.15 billion sale of the Los Angeles Dodgers, soaring regional sports network valuations, and ancillary value outside of teams, like in IMG, Cornwell is relishing the opportunity.

“What has happened over the past four or five years with the increase in media revenues and stabilization of cost structures with the new CBAs is that the profitability of these franchises has gone up,” he said. “With cash flows up, you see nontraditional sports buyers like private equity funds looking at them. Historically, they would never. I am not seeing a lot of traditional PE firms buying teams outright, but they are looking at ways of getting into the sports ecosystem.”

Following the footsteps

Cornwell was born into a banking family, named after his father who worked in investment banking and then

Cornwell’s current portfolio includes overseeing the pending sale of IMG.
Photo by: Patrick E. McCarthy
founded Granite Broadcasting. His mom was a bank examiner, so it almost seemed preordained what career he would land.

In Cornwell’s early days at Morgan Stanley, which he joined in 1998 out of Stanford Business School, many people did a double take when he walked into meetings, expecting an older version to walk through the doors. It’s one of the reasons Cornwell adopted using K, his middle initial, ahead of his first name upon introduction and on business cards, to ensure those who heard his name for the first time distinguished him from his father.

Cornwell majored in government at Harvard, his father’s alma mater. And fresh out of school, he joined McKinsey, the consulting firm, before joining the NFL and later going to graduate school.

Eric Baker, the CEO of European ticketing firm Viagogo, is a Cornwell friend dating to their days at the consulting firm and Stanford.

“He is on the short list of guys I call to get perspective on sports deals,” said Baker, who boasts a summer home in the Hamptons close to Cornwell’s. “He always has his pulse on what is going on in sports.”

That started with his time at the NFL, a more informal time for the league when a junior analyst like Cornwell could have his hands in everything (even sock length).

“I remember [Commissioner Paul] Tagliabue came by and just introduced himself, and one of the first things he said was, ‘You know I held the record for rebounding at Georgetown before Patrick Ewing,’” Cornwell recounted.

He worked there with future Commissioner Roger Goodell, Joe Siclare, now the chief financial officer, and Joe Ellis, today the Denver Broncos president. Tom Spock, then the head of NFL Enterprises, wrote a letter of recommendation for Cornwell to Stanford.

“Don has a great personality,” said Spock, who is a media consultant now. “He lives in a larger world than just the world of his office.”

Perhaps it is coincidental that for his first major sports transaction Cornwell advised Dan and Art Rooney on the restructure of the Steelers after the league ruled that family members’ ownership of horse tracks violated league anti-gambling rules.

The deal involved debt, equity, reshuffling and selling partnership interests, all on the heels of the 2008 financial crash.

“It wasn’t an easy time,” said Art Rooney, the Steelers’ owner now. Cornwell could get excited at times trying to get certain deal points together, Rooney said.

“I am happy he was our financial adviser,” Rooney said.

Not all of Cornwell’s work is as high profile. He advises the NBA on the valuation of team media contracts, which is a controversial area when a team that owns its rights can value them less than market rate for the purposes of limiting their payments into revenue sharing.

“Teams have their views on media valuations so we rely on experts,” said Bill Koenig, the NBA’s president of global media distribution.

Cornwell will say little about his most high-profile assignment, co-advising on the sale of IMG to William Morris Endeavor, even long after the sides announced the transaction.

That transaction tested him, with frequent erroneous media reports, the high-profile nature of IMG, and the lengths he had to go through to keep the process quiet, underscored by his continued reticence.

Clearly though he values IMG’s media assets, believing that there is nowhere to go but up.

“Today we get the question, ‘Is there a bubble in the value of sports rights?’ ” Cornwell said. “My own personal view is there is not.”

Giving back

Cornwell, as the son of African-American bankers, said he feels a strong need to give back to his community.

“Both my parents were African-Americans on Wall Street in the ’70s and ’80s, so I had a first-row seat for what they went through,” he said. “Frankly [there are] not a lot of African-Americans on Wall Street today, so it always amazes me what they went through.”

He chose education as his focus, sitting on the board of directors for a charter school in Brooklyn, and the East Harlem Tutorial Program, a 56-year mainstay in the underprivileged neighborhood.

“He is incredibly committed, he is co-chair of [the] fundraising and communications committees, which means he attends eight board meetings a year and even hosts an annual event,” said Jeff Ginsburg, who runs the charity. “When you go to that event, you see that Don has a lot of friends.”

Rob Tilliss

Founder, Inner Circle Sports
It was a banner year for Inner Circle, with advisory roles on the sales of the Florida Panthers, New Jersey Devils and Phoenix Coyotes in 2013. Inner Circle’s biggest deal since Tilliss started the firm in 2002 was advising Fenway Sports on the 2009 purchase of Liverpool Football Club. Tilliss formed Inner Circle after running JPMorgan Chase’s sports lending practice.

Photo by: Galatioto Sports Partners
Sal Galatioto

President, Galatioto Sports Partners
One of the more entertaining personalities in the sports finance world, Galatioto’s firm advised the Maloofs last year on the sale of the Sacramento Kings. GSP played a central role in the bankruptcy saga of the Texas Rangers, helping force the team to auction against MLB’s wishes.

John Moag
Photo by:

Chairman & CEO, Moag & Co.
Moag was the chairman of the Maryland Stadium Commission in 1995 when the state struck the deal to lure the Browns from Cleveland. From that he launched his sports career, and over the years has advised on the sales of the Ravens and Dolphins, and more recently the San Diego Padres.

Photo by: Tipping Point Sports
Mitchell Ziets

CEO, Tipping Point Sports
Ziets is an expert in stadium lease negotiations, having worked with a variety of teams, including the San Diego Chargers. He advised the ill-fated Seattle group’s push to buy the Kings, and now is involved in efforts to bring the NHL to Seattle.

Steve Greenberg

Managing director, Allen & Co.
Greenberg has long since moved beyond being known as Hank Greenberg’s son. He is the go-to guy for MLB team sales and transactions, and has frequently been rumored as a candidate for commissioner of the sport. He is not limited to MLB, however, and now is advising the Milwaukee Bucks on a prospective sale of the club.

Vataha (left) and Caporale made their mark advising on team sales.
Photo by: Chris Churchill
Robert Caporale

Chairman, Game Plan
Randy Vataha
CEO, Game Plan
A two-man shop with offices out of their homes on the respective coasts, Game Plan features Caporale and Vataha, a former Patriots wide receiver. They have long made a mark advising on team sales, including last year’s Kings transaction, representing the buyer. Over the years they have advised on the sale of the Golden State Warriors and Boston Celtics, and once even advised Bain & Co. on a bid to buy the entire NHL.

Rising equity markets, owner friendly collective-bargaining agreements, healthy business metrics. Despite these factors blessing sports leagues, or perhaps because of them, the sale of teams has been sluggish at best.

In Major League Baseball, for example, there has not been a sale of a team in two years, the last being the San Diego Padres and the Los Angeles Dodgers.

“It is pretty unusual,” said Allen & Co. investment banker Steve Greenberg, the top sales adviser in baseball. “There are a lot more buyers than sellers.”

Currently, only one team in the top four leagues is officially on the market, the Milwaukee Bucks (Greenberg is the adviser).

Sports teams can sell for a few reasons, ranging from personal issues (a divorce drove the Padres sale) to financial problems facing the owner. The new CBAs, by better controlling labor costs, have made owning a team a less financially risky prospect, reducing red-ink induced sales.

“People are holding on because media rights continue to rise,” said Sal Galatioto, whose Galatioto Sports Partners

The San Diego Padres are the last team to sell in Major League Baseball.
Photo by: Getty Images
advised the sellers of the Sacramento Kings last year. “I haven’t seen it this quiet in three or four years.”

Four years ago the mergers and acquisitions market was still recovering from the financial crisis, so the comparison is a stark one.

Galatioto for one is busying his firm with the sale of limited partnership stakes. That market has risen with limited partnership positions now one of the only ways to get ownership in sports, even if it doesn’t bring control.

Not all agree the M&A market is quiet. Rob Tilliss, founder of Inner Circle Sports, had a busy year in 2013, advising on the sale of the NHL’s Florida Panthers and New Jersey Devils, to name a few. The financing markets are offering cheap money, he said, making it easier for buyers to cover rising values.

“It is a small number of lenders, but they are hungry, and they are active,” he said.

But Tilliss is an outlier with his opinion.

Take Bob Caporale, chairman of Game Plan, who said that while it may be a matter of simple timing, the market for big league sports teams is very quiet.

That all said, there are other markets. Major League Soccer has seen several team sales, and many investment bankers are working overseas in European soccer. And there are a steady stream of ancillary sports deals, ranging from marketing agencies to technology companies.

That may be where the juice in the sports mergers and acquisitions market stays, the bankers say. With satisfaction high from owning a team, and financial losses rare, Greenberg’s question is this: “Why would you ever sell one of these things?”


Sacramento Kings
Seller: Maloof family
Buyer: Vivek Ranadivé
Price: $534 million
Note: Less than two weeks after buying controlling interest, the Ranadivé Group purchased another 7 percent share to bring the total to 72 percent ownership of the team.

New Jersey Devils
Seller: Jeff Vanderbeek
Buyer: Josh Harris and David Blitzer
Price: $320 million

Florida Panthers
Seller: Cliff Viner
Buyer: Vincent Viola
Price: $250 million

Phoenix Coyotes
Seller: NHL
Buyer: Ice Arizona Acquisitions Co., a group headed by George Gosbee and Anthony LeBlanc
Price: $170 million

Columbus Crew

Seller: Hunt Sports Group
Buyer: Precourt Sports Ventures
Price: $68 million

Colorado Rockies
Seller: Molson Coors sold its 14.5 percent stake in the franchise.
Buyer: Arizona developer Jay Stein
Note: Sale ends the equity ownership the brewer has held in the club since the team’s inception in 1991.

Chivas USA
Seller: Jorge Vergara and Angelica Fuentes
Buyer: MLS
Note: Published media reports listed the price of the sale, which closed in February, at $70 million. The league is actively looking to resell the club to a new ownership group.


IMG Worldwide*
Seller: Forstmann Little & Co.
Buyer: William Morris Endeavor Entertainment with private equity backer Silver Lake Partners
Price: $2.4 billion
Note: Auction was run by investment banks Evercore Partners and Morgan Stanley

Seller: Arbitron
Buyer: Nielsen Holdings
Price: $1.26 billion

Easton Baseball/Softball
Seller: Easton-Bell Sports
Buyer: Bauer Performance Sports
Price: $330 million

Outdoor Channel Holdings
Seller: Outdoor Channel Holdings
Buyer: Kroenke Sports & Entertainment
Price: $265 million

Harris Interactive
Seller: Harris Interactive
Buyer: Nielsen Holdings
Price: $116.6 million

Mervin Manufacturing
Seller: Quiksilver
Buyer: Extreme Holdings
Price: $58 million

Hawk Designs
Seller: Quiksilver
Buyer: Cherokee
Price: $19 million

Game On Sports
Seller: Game On Sports
Buyer: Lids Sports Group
Price: N/A

Digital Scout
Seller: Digital Scout
Buyer: PlayOn! Sports
Price: N/A

Seller: SportStream (owned by Vulcan Capital and Trail Blazers Inc.)
Buyer: Facebook
Price: N/A

Sports Propaganda
Seller: Sports Propaganda
Buyer: That’s My Ticket
Price: N/A

Immagine & Sport
Seller: Immagine & Sport
Buyer: Repucom
Price: N/A

Nelligan Sports
Seller: Nelligan Sports
Buyer: Learfield Sports
Note: Providence Equity had acquired Learfield for more than $500 million in September 2013.


Omnicom Group and Publicis Groupe
Price: $35.1 billion
Note: The company will be called Publicis Omnicom Group

* Pending
Source: SportsBusiness Journal research