Thread: Rumors fly that Broncos are available for purchase

Forbes' valuation of Rams was nearly $200 million off
Posted by Mike Florio on February 11, 2010 1:33 PM ET
The value of NFL franchises has been increasing in recent years, due to significant growth in profits. And as the value of a team rises, the return on the investment -- the profit -- must remain strong in order to justify the increased value of the team.

If, for example, a billion-dollar business merely breaks even on a consistent basis, it won't remain a billion-dollar business for very long.

And that's possibly what has happened to the Rams. In September 2009, Forbes pegged the franchise at a total value of $913 million, down from $915 million the year before. According to Howard Balzer of Globe-Democrat.com, however, the total value of the team was pegged at between $725 million and $750 million in connection with the sale of the 60-percent interest held by Chip Rosenbloom and Lucia Rodriguez to Shahid Khan.

So the next time NFLPA Executive Director De Smith laughs off (as he did last Thursday) a drop in operating profit for a team like the Packers from $34 million to $20 million, keep in mind that sagging financial performance makes the franchise less valuable than it was -- and it makes folks with the wherewithal to own a team less inclined to get in, and it could make those who already hold the keys to a club more inclined to consider getting out.

A reminder that is a Business first.

Originally Posted by silkamilkamonico

Everything I'm hearing from people associated with the player's union as well as the owners side, are saying that there will not be a salary cap in the new labor union. The players don't benefit from it and the majority of the owners have changed from wanting it to not wanting it. The only exception would be in the future if the economy not only rose to where it's flourished, but showed continued progress of flourishing.

Every impression from the players union as well as the owners, and economists in general are saying that there will be no salary cap in the future of the NFL. Even owners of other sports that operate without salary caps have spoken about how the poor economy has hurt the NFL's revenue in relation with the salary cap. Mark Cuban was also on SPortsNation this morning discussing it.

As business man I would never go for uncapped salaries. There has to be a limit on what a team can pay for talent or this become another MLB where the yankees win by default.

and minor league cities (read small market) like DEN, GB, KC, PHX, become their farm teams.

I do not see it happening.

Originally Posted by Jrwiz

As business man I would never go for uncapped salaries. There has to be a limit on what a team can pay for talent or this become another MLB where the yankees win by default.

and minor league cities (read small market) like DEN, GB, KC, PHX, become their farm teams.

I do not see it happening.

I myself don't know anything about business.

One thing Mark Cuban said was the business of owning a professional sports team is it isn't a regular business, especially dealing with the NFL, because the NFl doesn't have a competitor.

He also stated, with a salary cap, there's revenue sharing among the owners as well as the NFL, but because there is a floor cap that teams have to spend, some of the smaller market teams are still losing money, and expenses are higher than revenue. He used Jacksonville, Buffalo, and one other team as NFl teams that have expenses that are higher than revenue. They just can't sustain themselves, which is why you're hearing about possible moves to LA, which is a bigger market.

And the farm team example also would not work. For one, the NFl is the only professional sport where coaching takes on a higher priority than players. Also, money has to come from somewhere, and these team's that want to go out and spend money after money after money for players, it doesn't always equal success. Cuban cited the Washington Redskins, and also stated another point that wihtout a salary cap, Washington would not be able to spend what they do now because there is no longer revenue sharing distributed from being liscenced by the NFL.

I didn't see it happening either. But when I'm hearing 99% of these guys talk on the subject that understand the situation say the salary cap is going to be gone for good, I'm certainly not arguing.

Originally Posted by silkamilkamonico

Everything I'm hearing from people associated with the player's union as well as the owners side, are saying that there will not be a salary cap in the new labor union. The players don't benefit from it and the majority of the owners have changed from wanting it to not wanting it. The only exception would be in the future if the economy not only rose to where it's flourished, but showed continued progress of flourishing.

Every impression from the players union as well as the owners, and economists in general are saying that there will be no salary cap in the future of the NFL. Even owners of other sports that operate without salary caps have spoken about how the poor economy has hurt the NFL's revenue in relation with the salary cap. Mark Cuban was also on SPortsNation this morning discussing it.

I understand were both side are coming but I think we need clear that owners wanting salary cap with ceiling, but no floor like today. While the union doesn't want ceiling, but sure want a floor to ensure owners don't act like the Marlins.

Originally Posted by elsid13

I understand were both side are coming but I think we need clear that owners wanting salary cap with ceiling, but no floor like today. While the union doesn't want ceiling, but sure want a floor to ensure owners don't act like the Marlins.

If that's the standard , does the union not understand that our economy is still in recession? Sounds like the Union want's an unlimited possibility of income (which I understand) without a balence of funds. The money has to come from somewhere, and as far as the NFL is concerned, it's proven that in the last few years it isn't what it used to be.

Not going to happen, just the scrambling of journalists with nothing to talk about.

One thing that nobody has mentioned is that IF the Broncos are for sale Ed Kaiser (previous owner of the Broncos) is first in line to buy. Bowlen accepted a condition that Kaiser has right of first refusal should Bowlen decide to sell. Does anyone remember the lawsuits a few years ago when Bowlen tried to give a portion of the Broncos to Elway? The claimant was Ed Kaiser suing that he wasn't provided the opportunity to trump Elway.

Originally Posted by silkamilkamonico

If that's the standard , does the union not understand that our economy is still in recession? Sounds like the Union want's an unlimited possibility of income (which I understand) without a balence of funds. The money has to come from somewhere, and as far as the NFL is concerned, it's proven that in the last few years it isn't what it used to be.

Players unions (unions in general) don't give a crap especially one that represents the NFL because the only way they start caring if the stadiums are empty on Sunday and fans quit watching.

Originally Posted by silkamilkamonico

I myself don't know anything about business.

One thing Mark Cuban said was the business of owning a professional sports team is it isn't a regular business, especially dealing with the NFL, because the NFl doesn't have a competitor.

He also stated, with a salary cap, there's revenue sharing among the owners as well as the NFL, but because there is a floor cap that teams have to spend, some of the smaller market teams are still losing money, and expenses are higher than revenue. He used Jacksonville, Buffalo, and one other team as NFl teams that have expenses that are higher than revenue. They just can't sustain themselves, which is why you're hearing about possible moves to LA, which is a bigger market.

And the farm team example also would not work. For one, the NFl is the only professional sport where coaching takes on a higher priority than players. Also, money has to come from somewhere, and these team's that want to go out and spend money after money after money for players, it doesn't always equal success. Cuban cited the Washington Redskins, and also stated another point that wihtout a salary cap, Washington would not be able to spend what they do now because there is no longer revenue sharing distributed from being liscenced by the NFL.

I didn't see it happening either. But when I'm hearing 99% of these guys talk on the subject that understand the situation say the salary cap is going to be gone for good, I'm certainly not arguing.

I'm not saying it would work but the was what the smaller markets would become. there is no way that the marlins will ever be competitive LONG term with the yankees.

Same would apply to DEN vs WAS, NYC teams and DAL. We may hit the jackpot with a few draft choices and get 4-5 year contracts not hem but when it is time for FA the big fish will scoop them up with huge salaries. just like they do today BUT now they are limited to haw many they can carry.

Originally Posted by The Glue Factory

One thing that nobody has mentioned is that IF the Broncos are for sale Ed Kaiser (previous owner of the Broncos) is first in line to buy. Bowlen accepted a condition that Kaiser has right of first refusal should Bowlen decide to sell. Does anyone remember the lawsuits a few years ago when Bowlen tried to give a portion of the Broncos to Elway? The claimant was Ed Kaiser suing that he wasn't provided the opportunity to trump Elway.

This. I was gonna bring it up too - until Kaiser dies, he's got the right to buy the Broncos before any other bidder. So while it would all make a lot of sense (Pat's kids don't want to run/own the Broncos, Stan loves football and would LOVE to own the Broncos, he looks like he could get out of the Rams...) I don't see it happening.

Bowlen won his appeal with the Elway 10% stake thing, but I don't see how he gets around Kaiser unless Kroenke buys him off.

~G

Originally Posted by G_Money

This. I was gonna bring it up too - until Kaiser dies, he's got the right to buy the Broncos before any other bidder. So while it would all make a lot of sense (Pat's kids don't want to run/own the Broncos, Stan loves football and would LOVE to own the Broncos, he looks like he could get out of the Rams...) I don't see it happening.

Bowlen won his appeal with the Elway 10% stake thing, but I don't see how he gets around Kaiser unless Kroenke buys him off.

~G

Or prices it out of kaisers limited funds. and right now few banks are going to loan against team equity for any NFL,NBA,NHL team.

Originally Posted by Jrwiz

Or prices it out of kaisers limited funds. and right now few banks are going to loan against team equity for any NFL,NBA,NHL team.

The Original Kaiser deal called for a price close to what it was sold for. BUt if Im Kaiser, I would take a mere $50 million just to look the other way.

In regards to Kaiser, I found the following on MHR:

http://www.milehighreport.com/2008/3/28/95852/2379

"When Kaiser had sold the Broncos to Bowlen, he included a special clause called "right of first refusal" which gave Kaiser the right to repurchase any part of the Denver Broncos franchise that Bowlen offered to sell to a third party on the same terms. In order to save us all from the legalise required to explain all this, it basically comes down to the fact that Kaiser wanted to purchase a Minority Interest of the Broncos for the exact price Bowlen had offered it to Elway."

Based on the above, it appears Kaiser's "right of first refusal" does not apply to purchasing the whole team, but just a portion - especially the part that says "to sell to a third party on the same terms", would that just indicate a portion of the team, rather than Bowlen outright selling the team to someone else? If Kroenke buys the Broncos, I don't think he would be considered a "third party".

Originally Posted by claymore

Rumors fly that Broncos are available for purchase
Posted by Mike Florio on February 11, 2010 8:38 AM ET
The fact that the Rams have found a buyer reminded me of a rumor that snaked its way through the grapevine last week.

There's talk that the Denver Broncos could be available to be purchased from current owner Pat Bowlen.

And there's a connection between the Rams and the Broncos. If Shahid Khan will be buying not only the 60 percent of the Rams currently held by Chip Rosenbloom and Lucia Rodriguez but also the 40 percent owned by Stan Kroenke, Kroenke could couple the cash he gets from Shahid with a chunk of his wife's Wal-Mart money and purchase the Broncos.

Kroenke already owns the NHL's Colorado Avalanche and the NBA's Denver Nuggets. He reportedly was interested in acquiring controlling interest in the Rams, but the league's cross-ownership rules require teams in multiple leagues to be located in the same market.

We need to be clear on this one. We're not saying that the Broncos are for sale; we're saying that there's a rumor they're for sale. And we're speculating that Kroenke could be interested, especially if he's cashing out his chips in St. Louis.

Clay, will you loan me about $975 million...?

I'd like to buy something...

i guess the rams deal is done ,the papers have been signed....not sure if its for the whole team or the 60% but apparently the majority share has been sold.
maybe pat is looking at this as a rebuilding time anyway and a good time to get out since his kids dont want the team (can you imagine?)