´ Steel Curtain Rising: Several Questions on Steelers Sale Answered by Post-Gazette Reporting

Who gets the game ball for the Steelers win over the Texans?

Wednesday, July 9, 2008

Several Questions on Steelers Sale Answered by Post-Gazette Reporting

Dogged reporting by Gary Dulac and Bob Smizik have answered many questions about the Steelers impending sale/ownership restructuring.

Last night, Steel Curtain Rising pointed out two major inconsistencies in the national stories on Stanly Drunkenmiller bid to acquire controlling interest in the Steelers.

Those reports indicated that Druckenmiller was close to an agreement with Tim, John, and Pat Rooney to buy their shares of the Steelers. However, those shares would only bring Drunkenmiller 48% of the Steelers.

Gary Dulac of the Post Gazette has confirmed, with two sources, that Art Rooney Jr. is also considering selling to Druckenmiller. That would give him 64%. This is also supported by a press release issued by the four Rooney brothers, confirming that they had hired Goldman Sacks to advise them on a potential sale.

Credit Dulac for actually getting Tom McGinley on the record. McGinley’s comments confirm that this is quite serious, and not just a product of idle speculation.

McGinley also sheds light on the tenor of these negotiations, as he expressed to Dulac his hope that this works out, given that he regards the Rooney boys like brothers. This both suggests that some of the reported tension within the family is real, but it also holds out the possibility of an amicable settlement.

Dulac explicated stated that McGinley’s willingness to sell is unknown, although this comment is a little odd given that one must figure that if he spoke to McGinley, he must have queried McGinley about his intent.

Dan’s Share of the Race Tracks

The Post Gazette’s Bob Smizk also spoke to an issue first raised by Steel Curtian Rising when the story broke, namely what is going to happen to Dan Rooney’s interest in the family race tracks. While Smizk reports no new facts, he does suggest that any such deal would include Dan’s brother buying his share of the race tracks.

Various press reports have cited studies assessing the value of the Steelers at between 800 million and one billion dollars. No media have reported on the value of the racetracks role.

Smizik suggests, as did Steel Curtin Rising, that any consolidation would include Dan Rooney’s shares in the race tracks, which is logical given that this move was spurred by a need to conform to NFL anti-gambling policies.

Smizik’s is interesting, if perhaps flawed. He concludes, probably correctly, that Rooney cannot afford to buy out all of his brothers. He continues to say that Dan Rooney can probably not afford to buy out even one of his brothers, even if he includes his shares in the race track as part of the price.

This second assumption by Smizik is less certain, as it has got to be easier to put together the money to buy 16% of the Steelers as opposed to the money needed to by 64%. However, any proposal by Dan Rooney was almost certainly predicated on him and/or Art II using their share of the profits to finance the deal, and a smaller ownership stake would naturally correspond to a smaller ownership stake.

Timing

Gary Dulac’s reporting stands in sharp contrast to reports issue by both the Associated Press (as reported on ESPN) and the Pittsburgh Tribune Review. Both of those reports indicated that a deal might close within days. Dulac’s indicates a timeline of about a month.

The Rooney brother’s press release indicates that they are contracting Goldman Sacks as part of any estate planning process, and also indicates support for Dan and Art II Rooney’s statement reassuring a place for Rooney family in the teams management.

If the timeline reported by Dulac is correct, then it increases the probability that a deal will be worked out that leaves Dan Rooney in control of the team, and possible preserving controlling interest by the Rooney/McGinleys.

On the other hand, if the AP and Trib. Review are correct, and the deal will close in the next few days, then it is unlikely that the Rooneys will maintain controlling interest.

No comments: