Broncos Estate Sale Leaves Team, NFL Without Control of Typical Auction
Irwin Kishner, co-chair of Herrick's Sports Law Group, spoke to Sportico about the sale of the Denver Broncos franchise by the trust of late owner Pat Bowlen. According to the article, the trustees have "a fiduciary responsibility to maximize profits for Bowlen’s estate. In simple terms, the team has to be sold to the highest qualified bidder." This is different than a traditional sale, which allows owners to solicit bids, but provides them with the freedom to select whomever they want. Additionally, the NFL has to approve any buyer.
Kishner explained, "There’s a lot of outside pressure on the NFL to figure out how to [add an owner] in a way that hopefully will improve the overall look and feel of the league," adding, "But a trust is required to maximize the assets and what it’s administering to the beneficiaries. That is how, in a very rudimentary way, trust and estate law works."
The article notes that Kishner is referencing diversity, which the article described as "a priority for the league and also an area where the estate sale could complicate things." The article further notes that NFL Commissioner Roger Goodell spoke about his efforts to attract minority bidders for NFL teams in his annual "State of the League" press conference. However, the trustees are restricted due to their obligation to sell to the highest bidder. The article noted that while a private sale could result in a move towards a minority bidder, the Broncos hands are partially tied if another qualified bidder offers more money.
The article went on to cover several recent sales of major sports teams. Kishner reflected, "All leagues, like co-op boards in New York City, have a right to decide who becomes a member of their fraternity... provided there is no discrimination."
Read the full article in Sportico here. Access may require a subscription.