Cameron Fleming #73 of the Denver Broncos runs down the field before a game against the Kansas City Chiefs at Empower Field at Mile High on January 8, 2022 in Denver, Colorado.
Dustin Bradford | Getty Images
The first offers are underway for the Denver Broncos’ sale process, and the review is ongoing. The NFL franchise could sell for $4 billion, which could be the most expensive deal in league history.
Ancient walmart Chairman and Walton Family Heir Rob Walton, who is worth about $68 billion, is considered a strong candidate to buy the team. NBA and NHL owners Josh Harris and David Blitzer, who both hold minority stakes in the Pittsburgh Steelersare also interested, according to people familiar with the sale.
Even a decentralized autonomous organization, or DAO, made up of crypto enthusiasts is interested and fundraising to cover the costs.
The sale would be significant in every way in the sport. The Broncos are owned by the Pat Bowlen Trust and are valued at $3.7 billion, according to Forbes. It’s ranked 10th in the NFL. If the team is sold for the projected price of $4 billion, it will eclipse Alibaba co-founder Joe Tsai’s $2.3 billion purchase of the NBA’s Brooklyn Nets in 2019. The manager hedge fund manager David Tepper bought the Carolina Panthers from the NFL for $2.2 billion in 2018.
Elsewhere, Los Angeles Dodgers and Lakers co-owner Todd Boehly and British billionaire Jim Ratcliffe are vying for ownership of English soccer club Chelsea FC. Last week, Boehly was cleared to enter into exclusive talks to buy the club from Russian billionaire Roman Abramovich, according to The the wall street journal. But INEOS, the chemical company of which Ratcliffe is chairman, issued a statement who says he is offering more than $5 billion for the club.
Sports bankers believe the Broncos’ auction could set a new NFL record. Team valuations are often inflated and largely speculative – with the exception of formal and public sales. Experts use multiples of revenue and add operating profit, adjusted for revenue sharing, and any other club-related assets which might include real estate to arrive at a number.
The sale could end up reaching around $4 billion, noting the city of Denver’s young demographics with its “technology, natural resources and tourism,” said Marc Ganis, CEO of consulting firm SportsCorp. “It’s not a single-industry site, which is what you’re looking for when buying a sports franchise.”
Although the bidders are not publicly known, Ganis knows the sale process and who plans to buy the Broncos. He said the interested parties are “strong and very successful businessmen” who are “serious about buying the team”.
The Broncos have officially been released in February after years of legal disputes, including a family lawsuit in 2019. A month before the team goes on sale, a Denver judge ruled in favor of the Broncos and overturned a right of first refusal issue with ROFR Holdings Ltd. – the company created by former team owner Edgar Kaiser. He sold a majority stake in the Broncos to Pat Bowlen in 1984 for $78 million.
Under Bowlen’s ownership, the Broncos made seven Super Bowls and won three championships. He died in 2019 and bequeathed his approximately 78% stake in the team to the Pat Bowlen Trust.
Javonte Williams #33 of the Denver Broncos carries the ball against the Cincinnati Bengals at Empower Field at Mile High on December 19, 2021 in Denver, Colorado.
Matthew Stockman | Getty Images
Ganis said the town offers a “location bonus” because the area attracts wealthy people who like to ski. “Never underestimate the value of having a team in a place that’s either a really quick flight or somewhere you’d go anyway,” he said.
If the Bowlen family got $4 billion or more, it would likely boost the values of other NFL teams. Denver-based NBCUniversal KUSA affiliate reported that Bowlen’s seven children would split 78% of the final prize. That’s over $400 million each.
Broncos general manager Joe Ellis said the team hopes to have a new owner in place by the 2022 NFL season. At the NFL’s annual meetings in March, Ellis is quoted by the Denver Post as saying that there is “a significant amount of interest from a number of very qualified bidders”.
The Broncos and investment firm Allen and Company did not immediately return a request to CNBC to discuss the trade.
Beth Hall | Bloomberg | Getty Images
Last month the The New York Post reported Walton would make an offer. Walton is related to Los Angeles Rams owner Stan Kroenke, who married his cousin Ann Walton Kroenke. Ganis said Walton becoming an owner would be a “major validation” for the NFL’s business model.
“These are people who can buy whatever they want and that’s where they choose to put their money,” Ganis said. “It’s a validation that it’s good business for the best businessmen.”
Although inflation is high, investors are still interested in buying sports franchises, said economist Judd Cramer. He called owning a professional squad a “real asset” as clubs traditionally increase in value every year.
And inflation increases “the cost of having money not invested in real assets,” said Cramer, who served in former President Barack Obama’s administration.
Robert Smith, Vistas Equity Partners, Founder, President and CEO
Adam Galica | CNBC
CEO of Vista Equity Partners Robert F. Smith was assumed to be a bidder for the Broncos. He has a net worth of $8.9 billion, according to Bloomberg. But Smith, a Colorado native, is adamant he’s not interested.
In a statement to CNBC, Vista Partners said: “Robert’s priorities right now are the fight for voting rights and economic justice rather than being the black owner of a team. He continues to focus on the best way to help underserved communities gain access to capital, health care, education and the ballot box.The pursuit of Broncos ownership is not on his radar.
The NFL is looking for a black owner – it was made clear during this year’s Super Bowl in Los Angeles. NFL Commissioner Roger Goodell noted that he is “personally involved” attracting more minority candidates for NFL ownership, as the league has never had a black owner in its more than 100-year history. Goodell noted that the NFL had met with media mogul Byron Allen about buying an NFL team. It’s unclear where that is, though.
The NFL Finance Committee, including the owner of the Kansas City Chiefs Clark Hunt directs, will decide to put a selected bidder to the vote. A candidate needs at least 24 votes from 32 NFL team owners.
The NFL declined to comment.
Russell Wilson #3 of the Seattle Seahawks at the 2019 NFL Pro Bowl
Mark Brown | Getty Images Sports | Getty Images
A new group of owners could be heading for a playoff contender.
In March, the Broncos traded the Seahawks quarterback from Seattle Russell Wilson. Prior to that, Denver hired a new head coach in Nathaniel Hackett – the former offensive coordinator for the Green Bay Packers.
Commercially, the Broncos have made more than $400 million in annual revenue since 2017, according to Forbes. This is primarily due to NFL media revenue sharing. The NFL pays the teams more than $300 million each, annuallyof its national income.
And that number is set to rise as the NFL reached a new $100 billion media rights deal in March 2021. Its Sunday Ticket media rights are on the market for more than $2 billion a year, and the NFL has been growing every year. $2 billion sponsorship money.
The new owner of the Broncos, however, will have to invest in the team’s gaming site.
Empower Field at Mile High was built in 2001, cost $400 million, and holds around 76,000 for NFL games. Ganis said the complex could use “significant upgrades” because it’s not up to date with new NFL stadiums.