The Seahawks sale could set an NFL record — but it isn’t because of their Super Bowl win

Irwin Kishner, co-chair of Herrick's Sports Law Group and co-chair of Herrick's Corporate Department, was quoted in The Athletic in an article discussing the recent announcement by the estate of the late owner of the Seattle Seahawks of the plan to sell the franchise weeks after their Super Bowl win. The plan to sell was predetermined "after Allen died in 2018 and placed the team in a trust with the stipulation that it and his other sports assets would eventually be sold, with the proceeds put toward philanthropic endeavors." According to the article, the Seahawks recent Super Bowl win will add a new layer to what is predicted to be a record deal for an NFL franchise.

“The number seems to go up every time (an NFL team is sold), and I would not be surprised if this sets a record,” said Irwin. The article further notes that numerous factors going into franchise valuations including revenue, historical and projected sales, the condition and ownership of the team's stadium, the strength of the brand, the debt burden and the league's current and future economics. 

In addition, "NFL franchises are money machines practically guaranteed not to lose value. They're also scarce." In the last decade, only three franchises changed controlling owners, while there have been multiple sales of minority interests. 

While the values "seem to have no ceiling," the high prices also limit the pool of prospective buyers. The NFL requires an individual to own at least 30 percent interest for control. In addition, because the Seahawks are held in trust, it is the fiduciary duty of the executor of the estate to maximize the franchise's value in a sale. 

“There’s a limited universe, as these valuations keep on going up and up, of individuals who can actually afford to have that 30 percent of equity,” Kishner said. “So, I do think that that’s ultimately going to evolve. And one of the ways it will evolve is either that (requirement) goes down, or there’s more relaxing of how you get to that 30 percent and what you control and what you don’t control.”

Irwin also stated that he believes that the NFL's team values will not level off. 

Read the full article in The Athletic here. Access may require a subscription