'Low key' billionaire eyes Steelers By Carl Prine and Mike Dudurich TRIBUNE-REVIEW Wednesday, July 9, 2008
Next time you're at Heinz Field watching the Steelers, the boisterous fan next to you with his face painted black and gold, the guy so into the game he high-fives anyone next to him, might be a multibillionaire who can quote poet T.S. Eliot and spends his free time working with poor kids in Harlem.
He also might own the Steelers.
At the fringe of the Rooney family feud over future ownership of the famed NFL franchise, Stanley Freeman Druckenmiller, 55, reportedly has offered to buy all or part of the team -- although neither he nor his officers in the $4 billion Duquesne Capital Management venture fund he started in 1982 will comment.
The Associated Press reported Tuesday that a deal could be reached within days to sell a majority interest in the Steelers to Druckenmiller, taking control of the franchise away from the Rooney family.
Two officials familiar with the talks said the deal could be completed by the end of the week. Sources told the Associated Press that Druckenmiller wants to include Dan and Art Roooney II in his ownership group.
A: In many ways, this reorganization was inevitable. Art Rooney Sr.'s legacy was the Steelers and racing. In the early 1970s, Art purchased a dog track in West Palm Beach, Fla., a harness horse racing track in Yonkers, N.Y., and other racing investments. His five sons -- Dan, Art Jr., Timothy, Patrick and John -- own the majority of the Steelers' stock, divided in five equal shares. Dan ran the Steelers. Most of the other brothers handled the racing interests. In 2006, video slots were added to Yonkers Raceway, but NFL ownership rules prohibit gambling interests as investments for team owners. To comply with league rules, the Rooneys either had to divest their ownership shares in the Steelers or eliminate the slots. The decision of some of the brothers was to keep the slots and enter into buyout negotiations with Dan and Art II. Two years of talks have not produced a deal.
Q: Is there any fear the Steelers might leave Pittsburgh?
A: None. Because of the loyalty of Steelers fans and the success of Heinz Field, the Steelers are a successful business. The team generates $200 million in revenue and profits are reportedly at $20 million a year. The franchise is worth between $800 million and $1.2 billion. To move a franchise, a team must post financial losses for a few years. That's not happening in Pittsburgh. The Steelers are a winner on and off the field. The Steelers brand is one of the best in sports. The plan is for Dan and Art II to buy out some of Dan's four brothers, which will have an impact on operating expenses in years to come because they will have to borrow money to buy out their family members.
Q: Will the Steelers stay under the direction of Dan and Art II?
A: Most likely, but major changes in ownership must occur. According to one plan, Dan offered $35 million to each brother and the McGinley family, which owns 20 percent of the team, for a 5 percent stake in the Steelers. The brothers believe the price of the shares should be higher, so talks continue. To fund these transactions, Dan and Art II probably need to come up with a new partner, and the name being mentioned is Pittsburgh billionaire Stanley Druckenmiller, the chairman of Duquesne Capital Management. Druckenmiller, who's worth $3 billion, once lived in Pittsburgh, and was a loyal fan. He lives in New York now, but still has a company office in Pittsburgh.
Q: How is the league office handling the situation?
A: The league is sensitive to the Rooney ownership issues and isn't putting any pressure on the family. The league has imposed no deadline for resolution, and former commissioner Paul Tagliabue has offered his services as a consultant to mediate the situation. The league wants Dan and Art II to continue to run the Steelers, and it wants to make sure the team doesn't incur more debt than is manageable. That support has bought the organization two years to solve this problem. Even though the league has been working with the Steelers for those two years, it never leaked any of the details to the media. Years of being a model franchise earned the Steelers that perk.
Q: What will be the final resolution?
A: Ultimately, Dan and Art II should end up continuing to run the Steelers. Once the brothers who want to sell settle on the value of those shares, deals will be worked out. It probably means that a noncontrolling new partner such as Druckenmiller will be brought in as an investor. Budgets might be a little tighter because of a new debt load, but the Steelers should still be the Steelers in the end.
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Rooney brothers to huddle with NFL Friday, August 15, 2008 By Ed Bouchette, Pittsburgh Post-Gazette
TORONTO -- The five Rooney brothers will meet with NFL commissioner Roger Goodell at his office next Thursday in the ongoing attempt to iron out their ownership of the Steelers.
Steelers chairman Dan Rooney and his four brothers -- Art Jr., a Steelers vice president, Tim, John and Pat -- will join Goodell and NFL attorney Jeffrey Pash in New York City.
Over the past two years, the brothers have been trying to find a way to abide by NFL rules regarding ownership of their racetrack-casinos, as well as the Steelers. NFL rules forbid team owners to be involved in any kind of casino gambling. The Rooneys own a dog track in Florida and a horse track in New York, and each facility has added some type of casino gambling over the past several years.
Dan Rooney, who has divested his stock in the tracks, and his son, team president Art Rooney II have been talking to other possible investors so those two Rooneys can become principle owners. Each of the five brothers owns 16 percent of the club's stock, with the McGinley family owning the other 20 percent.
Rooney brothers reject Druckenmiller's bid Financier withdraws offer, believed to be about $550 million; other bids may be sought for Steelers Friday, September 19, 2008 By Gerry Dulac and Ed Bouchette, Pittsburgh Post-Gazette
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."
Two Rooney brothers to sell all shares But Art Jr., John to retain minority ownership in Steelers Friday, November 21, 2008 By Ed Bouchette and Gerry Dulac, Pittsburgh Post-Gazette
Two Rooney brothers will sell all their shares and two others plan to retain a portion of their stock and remain as minority owners of the Steelers when ownership of the franchise is reorganized under the control of Dan Rooney and his son, Art II, the Pittsburgh Post-Gazette has learned.
Tim and Pat Rooney plan to sell each of their 16 percent stake in the Steelers so they can remain involved in racetracks and casinos in Yonkers, N.Y., and West Palm Beach, Fla., family sources told the Post-Gazette. But John and Art Rooney Jr. each plan to keep a little less than half of their 16 percent stake.
But it's not just the Rooney brothers who are seeking to sell their shares to their oldest brother.
A small portion of the 20 percent share held by the McGinley family will be sold to Dan Rooney and his son or to the investors who are currently being assembled to help finance the sale. Rita McGinley will maintain her 10 percent stake in the team, said her nephew Jack McGinley Jr. The other 10 percent is spread among the six children of the late Jack McGinley.
The sides have agreed on a franchise value of $800 million, meaning a 16 percent share in the franchise would be worth $128 million.