The Broncos and the Pat Bowlen Trust announced today that the team is for sale, kick-starting a process expected to set a record price for a U.S. professional sports franchise.
The process could have a timetable of at least six months, according to a source, which could ideally put a new owner in place by the start of the 2022 regular season.
The trustees — president/CEO Joe Ellis, team counsel Rich Slivka and local attorney Mary Kelly — will hire an outside firm to handle the vetting of potential buyers and do background checks on the finances of interested parties.
In a statement, Ellis said the trustees have retained Steve Greenberg of Allen & Co., as their financial advisor and Joe Leccese of Proskauer Rose LLP as their legal advisor for the ownership transition.
“Selling an NFL team is a complex process involving numerous parties and league approval procedures,” Ellis said. “Nonetheless, the trustees hope to have the sale completed by the start of the 2022 NFL season.
“The Broncos are a special franchise that is part of the fabric of this region and whoever emerges as the new owner will certainly understand what the team means to our great fans and this community.”
The main difference between the Broncos’ sale and those of other organizations is the role of the trustees. Since there is no controlling owner in place, the trustees have a fiduciary duty to the beneficiaries (seven of Bowlen’s eight children) to secure the best price. Essentially, the highest-qualified bidder would emerge as the new owner and will be well-versed on the importance of the Broncos to the community.
The trustees and the firms they will hire will handle the process before presenting a potential buyer to the NFL’s Finance Committee, which then would make its recommendation to the league’s owners.
In a lengthy statement, the Bowlen family said, in part: “Our family is overwhelmed with gratitude for what this organization and community have meant to us. There are truly no words to express our deep appreciation to all of Broncos Country for its unwavering support during the past four decades.”
Pat Bowlen bought a majority interest in the Broncos from Edgar Kaiser in March 1984 and what followed was an era of unmatched success by a Denver sports team. With Bowlen in charge, the team won three Super Bowl titles in seven appearances.
The new owner will be the fifth in Broncos history, following Bob Howsam (1960), Gerald Phipps and Cal Kunz (1961-80) and Kaiser (1981-84).
Bowlen and his siblings paid $78 million for Kaiser’s shares 38 years ago. Last August, Forbes valued the Broncos at $3.75 billion, 10th in the NFL and 25th in the world among sports franchises.
The future of the Broncos has been mired in uncertainty since Bowlen retired from his day to day duties in July 2014 due to Alzheimer’s. The trustees — Ellis, Slivka and Kelly — were appointed by Bowlen to oversee the Broncos.
Two of Bowlen’s children, daughters Beth Bowlen Wallace and Brittany Bowlen, hoped to succeed their father as the Broncos’ controlling owner.
In 2018, Wallace, the second of Pat’s two children with Sally Parker, expressed her desire to succeed her father. That request was quickly denied by the trustees.
Months later, Brittany Bowlen, one of Pat’s five children with his widow, Annabel, said she wanted to succeed her father. Brittany eventually joined the Broncos in December 2019 at a vice-president level and she was promoted to her current post of senior vice president of strategy.
Brittany Bowlen was the trustees’ preferred choice to replace Pat, but on Dec. 30, 2019, Ellis said unanimous family support for Brittany “may not be a requirement, but it’s going to be necessary moving forward.” The Broncos, Ellis said, would ultimately be sold if that wasn’t achieved. And it hasn’t.
The Broncos are under no deadline to find a new owner, but because a sale has been possible for several years, it is possible they and the NFL long ago identified interested parties and began vetting their background and finances.
As a guide, we can look at the Carolina Panthers.
Founder and controlling owner Jerry Richardson, amid allegations of workplace misconduct, put the team on the market on Dec. 17, 2017. David Tepper, a billionaire hedge fund manager, signed a purchase agreement for a record $2.275 billion on May 15, 2018, and was approved by the league’s owners seven days later, and completed the deal on July 9.
The Broncos are expected to command a price well beyond Tepper’s purchase point due to the NFL’s new television deal worth $113 billion over 10 years and the introduction of legalized sports gambling in 30 states, including Colorado, that has opened up multiple revenue streams for teams who sign sponsorship agreements with online sports books.
The NBA’s Brooklyn Nets were sold for $2.35 billion when Joseph Tsai made an initial payment of $1 billion for 49% of the franchise in 2017 and $1.35 billion for the remaining 51% in 2019.
The Panthers are second, followed by the NBA’s Houston Rockets ($2.2 billion in 2017), MLB’s Los Angeles Dodgers ($2.15 billion in 2012) and the NBA’s Los Angeles Clippers ($2 billion in 2014).
NFL rules dictate a team’s ownership structure must include one person who owns at least 30% of the team, which will qualify them for controlling interest. A team can’t have more than 24 part-owners, but recent sales involving the Panthers, Buffalo Bills and Miami Dolphins have been for 100% of the shares.
This story will be updated.
