The restructuring of the Steelers ownership is a evolving fast.
On Monday, July 7th both national and local news reports indicated that Dan Rooney was attempting to put together a deal to buy out his brothers, both to conform to NFL anti-gambling guidelines and assure an orderly succession that would keep the team in family hands.
Tuesday July 8th brought the news that Stanley Druckenmiller of Duquesne Capital Fund Management had emerged as a possible buyer for the shares of Tim, John, and Pat Rooney. Early reports in both the Post-Gazette and the Tribune-Review cited unidentified sources that indicated whatever transaction took place, the Steelers management was not likely to be altered.
Some of those reports sought to dispute an article published in the Wall Street Journal, that painted a picture of acrimony within the Rooney family emerging over these negotiations. One unidentified source that was quoted in several reports indicated that the Rooney family was still close, but that there were concerns about inheritance tax.
The tenor of these reports generally held that the Rooney’s sought outside investors because they were concerned that Dan’s offer to his brothers was undervalued, and that he was taking on too much debt. One source suggested that outside bids were being considered as part of the “due diligence” process.
That news was reassuring to the faithful of Steelers Nation, but the good news did not last for long.
In the early hours of Wednesday July 9th, both SI.com and ESPN’s websites are running an Associated Press report that says that Druckenmiller will make an offer to buy majority interest in the team. The report also states that: “The impending sale is the result of a feud among members of one of sport’s most renowned families and has been simmering about two years.”
The Post-Gazette had reported the Druckenmiller was merely interested in providing capital, and that he would leave Rooney in control of the team, leaving the implication that a deal would leave Dan Rooney as majority owner.
However, the latest AP report diverges from that line sharply, stating that Drunkenmiller “is said to want to keep Art and Dan as part of the ownership group.” According to the AP, the deal could close in as soon as two days.
Unanswered Questions about the Steelers Ownership Restructuring
It is now clear that there is a very real possibility that the Rooney’s could soon lose control of the Steelers for the first time in their 75 year history.
Two days of press reports reveal a significant contrast between national and local coverage. National coverage has strongly slanted toward the conflict angle, whereas local coverage has leaned toward continuity, although the Tribune-Review’s most recent article about the story refers to a “Rooney family feud.”
It is impossible to know which set of reporters has better sources, although events on the ground do seem to be breaking toward the version depicted by the national media.
All press reports indicate that each of the Rooney boys own 16% of the team, with the McGinley family owning the remaining 20%. Press reports indicate that Drunkenmiller is going to buy out the three Rooney sons, John, Tim, and Pat.
If each son owns 16%, then that only adds up to 48%. If only two brothers sell, as some reports have indicated, then that only adds up to 16%. No press report has indicated that Art Rooney Jr. is interested in selling out, which makes sense as he has worked for the team, and only one report has mentioned the McGinley family selling, but that story mentioned that they would sell part of their shares to Rooney.
In addition, it must be assumed that any deal would require Dan selling his shares in the two race tracks that his brothers would like to continue to operate. Steel Curtin Rising’s speculation yesterday that the racetracks were declining in value has been contradicted by press reports indicating that both Pat and Dan Rooney declared in 2002 that the racetracks were more profitable than the Steelers.
If that is the case then it is hard then it would seem that Dan Rooney would need less cash to complete a partial buyout of one or more of his brothers.