In a previous article, I discussed just what is at stake in the on-going NFL/NFLPA labor negotiations. I laid down a prophecy that if we have:
- Baseball style free-agency
- No franchise tag
- No transitional tag
- NBA cash contract style-trading
- No salary cap
- No salary floor
- No revenue sharing or reduced revenue sharing
Then you will see Mayflower trucks loading up in all of the small NFL markets, headed for big markets. Los Angeles will have 2, not 1 franchise playing down in Industry. If San Diego loses the Chargers to Los Angeles, San Diego can replace them in 3-6 weeks with another team. Chicago will get a second team. Houston might get a second team. Las Vegas will get an NFL team. You will see a historical moment of unprecedented and inconceivable team movement.
Well... it turns out that there is more to the story than that. There more reasons why we might see a geographic redistribution of the NFL. In a very well written piece for the National Football Post, a fellow named Robert Boland laid out a few astounding facts that I was dimly aware of, but now keenly interested in.
- 18 of the Leagues owners are over the age of 65
- 8 of those owners are over the age of 80
- Ralph Wilson is 91
- Georgia's kids were assessed $200 million in inheritance tax on a franchise thought to be worth some $913 million.
- Very few NFL families have the sort of wealth necessary to shell out a cold $200m to the IRS upon the death of the Patriarch.
- The Rosenbloom's 60% will fetch a price valuing the team at $750m. This may have a negative impact on the valuation of all NFL teams.
- Kahn's offer is the best on the table. If his offer is rejected by NFL Finance, the next price is significantly lower.
With 8 owners over the age of 80, we may well see this scenario played out several more times soon. If anyone else besides me watched the documentary series "Full Color Football" on the NFL Network, you must have been impressed by the fact that several of the 1960s founders of the AFL are still around the league today. Al Davis, Ralph Wilson and Bud Adams are just three of them. While Bud is still alive and flipping the bird, both Al and Ralph look to me like they are on their very last legs. To be brutally honest, Al Davis has been on death watch for at least two years now. Raider fans get up in the morning and immediately check the Internet news and see if he is still alive. Al was not present at the NFL Scouting Combine this year.
Let us reason out a scenario together. Suppose that three of our oldest owners were to kick off together in the near the future... say by the end of 2010. They say that they always go in groups of 3. Suppose 3--or even 2--sets of heirs cannot afford to pay the sum of $200-$300m in inheritance taxes. What then?
Several teams will be revalued at the same time, according to real market prices. Put a couple of teams on the auction block in tax distressed conditions, and the Great Recession, and then let's see what happens. The price should go down.
NFL teams are such expensive toys that the collection of prospective buyers is very small each and every time a franchise hits the market. If there are two many franchises on the market at once, what happens to the price? The price will go down again due to the glut of franchises.
What happens if NFL Finance swings open the door to attract more potential buyers due to the glut? You might get a collection of less-well healed owners, who might have trouble carrying a financial bleeder. What happens then? They might look for more lucrative markets in which to vend their product.
The age of present ownership has to be considered be a risk factor when we consider whether an epoch of franchise movement might be on the horizon.
