Updated: Rooneys tell Druckenmiller no thanks

The Return of the Raider · Jul 9, 2008

A little surprising...I thought the Rooney's would never give up control.

http://www.post-gazette.com/pg/08191/895718-66.stm

cpawfan · Sep 17, 2008

Re: Controlling interest in Steelers for sale

An update on this

http://www.post-gazette.com/pg/08262/913090-66.stm

Even if four of the Rooney brothers decide not to sell each of their 16 percent shares in the Steelers franchise to New York billionaire Stanley Druckenmiller, it does not necessarily mean they are prepared or even willing to accept an offer made by their brother, Steelers chairman Dan Rooney, the Pittsburgh Post-Gazette has learned.

Sources who are intimately familiar with both sides of the ownership situation have indicated that the four Rooney brothers -- Tim, Patrick, John and Art Jr. -- might seek another outside bid in an attempt to gain even more money for their shares, a move that would cause Mr. Druckenmiller to withdraw his offer and further prolong a process that has been going on for two years.

Yesterday, a representative of the four Rooney brothers informed Mr. Druckenmiller, chairman of Pittsburgh-based Duquesne Capital Management, that the brothers are undecided if they want to accept his offer. However, the representative told him the brothers would likely give him an answer by tomorrow, keeping with an unofficial deadline issued by Mr. Druckenmiller six weeks ago.

The brothers are scheduled to vote today if they want to accept Mr. Druckenmiller's offer. Even if they decline his offer, the Rooney brothers might decide to seek another investor once a calamitous economy settles rather than accept the offer made by Dan Rooney and his son, Art II, the team president, according to the sources.

Such a move could also create a bigger problem for NFL commissioner Roger Goodell, whose strict guidelines prohibiting association with racetracks were the impetus for the restructuring of the Steelers ownership.

Mr. Goodell told the Steelers that anyone who has interest in racetracks and legalized gambling casinos cannot be involved in the ownership group.

That would involve at least three of the brothers: Tim, who operates Empire City at Yonkers (N.Y.) Raceway; and Patrick and John, who run the Palm Beach Kennel Club in West Palm Beach, Fla. Dan Rooney has divested his interest in the racetracks.

Mr. Goodell also wants at least one owner of a franchise to have at least 30 percent of their team's stock.

No timetable has been set by the league to resolve those issues. However, those guidelines are among the reasons Dan Rooney, who also owns a 16 percent share in the franchise, is seeking to gain at least 30 percent of the stock. The remaining 20 percent of the stock is owned by the family of the late Jack McGinley Sr.

Mr. Druckenmiller has offered an immediate cash payment to purchase the 64 percent shares owned by the four brothers and gain controlling stock interest in the franchise.

The offer was made nine months ago. He is not interested in being a minority partner, and sources have told the Post-Gazette he would immediately withdraw his offer if the Rooney brothers sought a bid other than the one being made by Dan Rooney.

While Mr. Druckenmiller's offer is not known, the Steelers franchise was recently valued at slightly more than $1 billion by Forbes Magazine -- a figure comparable to the $800 million to $1.2 billion estimated value placed on the franchise by Goldman Sachs, the Wall Street investment bank that is brokering the deal for the four Rooney brothers. Using a median price of $1 billion, that would place Mr. Druckenmiller's offer in the neighborhood of $640 million.

Dan Rooney has made two offers to his brothers, and his plan would require payments being spread over a number of years.
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cpawfan · Sep 19, 2008

Re: Controlling interest in Steelers for sale

http://www.post-gazette.com/pg/08263/913403-66.stm

Rooney brothers reject Druckenmiller's bid
Financier withdraws offer, believed to be about $550 million; other bids may be sought for Steelers

The four Rooney brothers have told New York billionaire Stanley Druckenmiller they are turning down his offer to buy their shares in the Steelers, ending a seven-month courtship in which they approached him with an opportunity to gain controlling stock interest in a franchise he always dreamed of owning.

After taking a vote in a late afternoon meeting, one of the Rooney brothers called Mr. Druckenmiller last night to tell him of their decision. Mr. Druckenmiller, chairman of Pittsburgh-based Duquesne Capital Management, immediately withdrew his offer to purchase each of their 16 percent shares. His offer was believed to be in the neighborhood of $550 million.

The vote to reject Mr. Druckenmiller's offer does not mean, however, that the Rooney brothers -- Tim, Patrick, John and Art Jr. -- have decided to sell their shares to their oldest brother, Steelers chairman Dan Rooney, who has also made an offer to purchase their combined 64 percent shares. Instead, they may opt to entertain other outside bids in an attempt to gain more money for their shares, according to sources familiar with the situation.

"Of course I'm disappointed," Mr. Druckenmiller told the Post-Gazette last night-- his first interview on the subject since he was approached by the Rooney brothers in February to help them resolve their estate planning issues and team ownership structure. "But those are their shares and they have every right to seek a higher price for them."

A family source told the Post-Gazette that John Rooney argued for his brothers to take Dan Rooney's offer at their meeting, but no decision was made on that matter.

"Neither proposal had sufficient support in its current form," said Art Rooney Jr., one of the brothers.

Mr. Druckenmiller, 55, an ardent Steelers fan who has season tickets to Heinz Field, viewed himself as a solution, not a problem, to the Steelers ownership issue. His offer to purchase the shares of the four brothers included an immediate cash payment -- a move he thought would greatly benefit the long-term health of the franchise and allow the Steelers to have financial freedom to remain competitive on the field because there was no interest or debt service

In addition, he wanted to retain Dan Rooney and his son, Art II, the team president, in their current roles. Mr. Druckenmiller even planned to designate Dan Rooney as the team's "principal owner," a role that would give him much of the same decision-making power he has now and even allow him to veto Mr. Druckenmiller himself in any league-related matter.

Mr. Druckenmiller, who has an estimated net worth of $4.5 billion, was seeking to gain majority stock control of the franchise and was not interested in being a minority partner.

In a prepared statement sent to the Post-Gazette, Mr. Druckenmiller said, "I believed that I could provide the family with an appropriate transaction that also would be in the best long-term interests of the Steelers, the NFL and the city of Pittsburgh. The solution I proposed included a request that Dan Rooney continue to manage the Steelers organization.

"Throughout our discussions, I made clear that if the family could resolve these matters internally, it should do so and I would gladly remain only a devoted Steelers fan. Based on recent developments, it has become clear that the Rooneys need substantial additional time to assess their options. I do not wish to complicate these efforts, and I also do not want the lingering uncertainty about my possible involvement to become a distraction to my business and my family. "

Mr. Druckenmiller imposed a flexible Sept. 19 deadline on the four Rooney brothers six weeks ago, hoping to bring some conclusion -- or even just productive movement -- to the process. That forced the brothers to meet yesterday and take a vote on his offer, even though Art Rooney Jr. told the Post-Gazette before the scheduled meeting that he wasn't going to vote.

"The deadline doesn't mean too much to me, with all due respect to Mr. Druckenmiller,'' he said. "I just want to do things that are right for my family and the Steelers, too, not because there's a deadline. If you're going to do things, you want to do it when it's right, not because of a deadline."

The process of selling stakes in the franchise began when the National Football League told the Rooneys they could not own racetracks with casinos and still be involved in ownership of the Steelers. What's more, the league also said they must abide by rules that require one owner to have at least 30 percent stock in the team.

Each of the five Rooney brothers, including Dan, the oldest son of founder Art Rooney Sr., owns 16 percent of the team. The other 20 percent is owned by members of Pittsburgh's McGinley family.

Art Rooney Jr. said the time is near for him and his three brothers to decide what to do with their shares.

"You get to a point where you have to make a decision in your life and we're there right now,'' he said. "It came about because of the NFL and its rules on gambling, which are very appropriate, and the other technical thing about their ownership deal.

"We've had a situation put on us by the league . . . I think we're getting close to the time where we have to make a decision."

That decision, though, does not include Mr. Druckenmiller.

"On a personal note, having spent time with all five Rooney brothers, I have come to hold them all in high regard, and it is easy to see why the organization has been so successful," Mr. Druckenmiller said in the statement. "Given my love for Pittsburgh and what I know the team means to the city, I wish them all the same success they have had in the past."
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cpawfan · Sep 20, 2008

http://www.post-gazette.com/pg/08264/913673-66.stm

Where do Rooneys go from here?
With one bid off the table, Steelers ownership in limbo
Saturday, September 20, 2008
By Gerry Dulac, Pittsburgh Post-Gazette

Shortly after learning his bid to purchase the Steelers was rejected, New York billionaire Stanley Druckenmiller called Dan Rooney on Thursday night to congratulate him and wish him luck in his attempt to buy part or all of the 64 percent shares owned by his other four brothers.

He might need it.

The path toward resolving what has become a burgeoning and complicated issue might not be without more detours for Rooney and his son, Art II, to gain controlling interest in the franchise founded by the late Art Rooney Sr. Especially after Dan's brothers -- Tim, Art Jr., John and Pat -- rejected Mr. Druckenmiller's up-front cash tender because they might be seeking to gain more money from a new outside investor for each of their 16 percent shares in the team.

At the same Thursday afternoon meeting in which they decided not to accept Mr. Druckenmiller's offer, the brothers also decided not to take any action on the bid made by Dan Rooney -- despite a motion by John Rooney to accept his oldest brother's offer, according to a family source.

The result: The ownership structure of the Steelers might not be any closer to being resolved than it was when the process began nearly two years ago.

Dan Rooney would not publicly comment yesterday on the prospect, but, in a joint statement he released with Art II, the team president, he said, "While we would have preferred our bid to have been accepted, we will continue our efforts to maintain the ownership of the Steelers in our family.

"We have been told on many occasions the other family members prefer to keep the franchise in the family. We look forward to ongoing dialogue within the family toward that goal."

The question remains, though, when will that be?

And at what price?

The Post-Gazette has learned the enterprise value of Mr. Druckenmiller's bid on the Steelers was $840 million, a price that takes into account the value of the entire business and includes the purchase of stock, not assets.

Enterprise value is a figure that represents the entire cost of a company if someone were trying to acquire it. It is a more accurate estimate of takeover cost than market capitalization because it includes preferred stock and cash reserves, but, in this instance, not debt.

Therefore, if each of the brothers sold their shares to Mr. Druckenmiller, they would each receive $134.4 million, or 16 percent of $840 million. If all four brothers sold their shares, it would cost Mr. Druckenmiller $537 million.

When the four brothers rejected his bid, Mr. Druckenmiller immediately withdrew his offer.

"I was told it didn't receive significant support," he said.

Meantime, the decision by the four Rooney brothers could, and likely will, mean another lengthy delay in the team's attempt to restructure its ownership to comply with NFL guidelines. They just spent seven months pondering Mr. Druckenmiller's bid before rejecting it, and now face the unenviable, perhaps unrealistic, task of finding a suitor at a time when Wall Street investors are skittish and uncertain about a plummeting market.

Or they can consider the only offer that remains on the table -- the one offered by their brother, Dan.

Either way, it doesn't seem as though that will pose a problem for the NFL.

League spokesman Greg Aiello reiterated in an e-mail yesterday that NFL Commissioner Roger Goodell has not set any deadlines for the ownership issue to be resolved. Beyond that, the league declined comment.

Mr. Druckenmiller, chairman of Pittsburgh-based Duquesne Capital Management, was approached by the four Rooney brothers in February about purchasing their combined 64 percent shares in the franchise. For seven months, the process thrust the 55-year-old hedge fund manager into the national spotlight, a position he has spent most of his life trying to avoid.

But he said he never changed his bid, and was "disappointed" when it was finally turned down.

"I don't like being in the press," Mr. Druckenmiller said. "I really need to disappear again, and I need to start now."
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cpawfan · Sep 20, 2008

http://pittsburghlive.com/x/pittsburghtrib/s_589212.html

Steelers Chairman Dan Rooney said Friday that the NFL franchise will remain in the family for now after his brothers rejected buyout offers by him and billionaire Stanley Druckenmiller.

"While we would have preferred our bid to have been accepted, we will continue our efforts to maintain the ownership of the Steelers in our family," Dan Rooney and his son, team President Art Rooney II, said in a prepared statement. "We look forward to ongoing dialogue within the family toward that goal."

The collapse of the negotiations between the Rooneys themselves and Druckenmiller ended weeks of public speculation about the future ownership of the franchise founded in 1933 by the late Art Rooney Sr.

Dan Rooney's brothers -- Art Jr., Pat, Tim and John -- have not talked to any other potential buyers, Art Rooney Jr. told the Tribune-Review.

Art Rooney Jr. said the brothers hope to take a "breather" from their efforts to resolve the ownership issue so it doesn't become a distraction to the Steelers.

Druckenmiller, a rabid fan, bowed out of negotiations Thursday when the brothers rejected his $800 million offer. Each brother owns 16 percent of the team.

When asked if the brothers will wait until after the season to resume any meaningful discussions on future ownership of the Steelers, Art Rooney Jr. said, "I honestly don't know."

The NFL has prodded the Steelers to restructure their ownership because the Rooneys own race tracks in New York and Florida that have casino gambling. That violates the league's gambling policy.

The Steelers also are in violation of a league rule that requires a majority owner to hold at least 30 percent of the team. The McGinley family owns the remaining 20 percent of the Steelers.

NFL spokesman Greg Aiello said no deadline has been set for the ownership issues to be resolved. He added that nothing has been scheduled as far as Commissioner Roger Goodell meeting with the five brothers -- something he did in August at NFL headquarters in New York -- to resolve the issue.

"The goal everyone shares is to resolve this as soon as possible," Aiello said via e-mail.

Art Rooney Jr. said the brothers have talked with only Dan Rooney and Druckenmiller about selling their shares. The brothers approached Druckenmiller seven months ago.

"We never shopped this deal around out of respect for my dad's memory and the Steelers and Pittsburgh and that," Art Rooney Jr. said. "Dan presented us with the deal, and we engaged Mr. Druckenmiller and talked to him for so long. Neither Dan's nor Mr. Druckenmiller's offer had sufficient support among the family."

Druckenmiller called Dan Rooney about 8 p.m. Thursday when he heard that neither of their offers had been accepted by the brothers.

"It could not have been a more congenial call," Druckenmiller said. "It was a great conversation. He couldn't have been nicer."

Finding an outside buyer willing to pay what the brothers want won't be difficult, despite the recent upheaval in the nation's financial markets, a leading sports franchise evaluation consultant said.

Don Ericson, president of Ericson Partners LLC of Dallas, said enough people have sufficient cash needed to buy an NFL franchise.

Forbes recently valued the Steelers, one of only three teams to win five Super Bowls, at about $1 billion.

"The economy won't mean squat. Nada," Ericson said. "One of my buyers over the years that bought an NFL team, he could write a bad check for $300 million and they would cash it at the bank, he was that strong.

"These are people that can write a bad check for $200 million, and their banker will cash it. Those are the kind of people that will buy NFL teams. They're just too big a toy."

Art Rooney Jr. said he and his brothers haven't discussed when they will resume the sales process.

Dan and Art Rooney II echoed Art Rooney Jr.'s hopes that the uncertain ownership situation does not take the focus away from what happens on the field.
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cpawfan · Sep 21, 2008

http://www.post-gazette.com/pg/08265/913826-66.stm

It may take awhile before we know who truly will wind up owning the Steelers in the long run, but one thing is certain: Changes will occur.

Everything is relative, but Dan Rooney has tried to keep ticket prices low at Heinz Field, compared to others around the league. He often hears from owners who tell him he should raise prices much higher, especially with the long waiting list to buy Steelers season tickets.

He also has resisted some of the rash marketing techniques others use to squeeze every last drop of revenue out of the franchise. Even a big-bucks owner does not guarantee that ticket prices and other methods to generate higher revenue won't be used -- check out the ticket prices of the New England Patriots and Washington Redskins, for example. Washington's Daniel Snyder once charged admission to training camp practices. He eliminated the practice the following year because he discovered that, when you charge admission to training camp practices, the NFL allows other team's scouts to attend. No admission, and team scouts are banned from those practices.

Yet, if the Rooneys ultimately remain in control, they will do so with other investors and likely more debt, which will compel them to seek other ways to generate more revenue to keep those signing bonuses coming and satisfy the debt.
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Updated: Rooneys tell Druckenmiller no thanks

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Updated: Rooneys tell Druckenmiller no thanks

The Return of the Raider Active Member

cpawfan Monsters do exist

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