Thursday, March 24, 2005

Does the NFL Know Something That Vikings' Fans Do Not?

Last week, I discussed the possibility that Vikings' owner Red McCombs is acting under a different set of assumptions than most Vikings' fans hold regarding the sale of the Vikings. At the time, I suggested that Red's trade of Randy Moss, Red's attempt to save face when confronted with strong fan opposition to the Moss trade, Red's deferment of signing bonuses--at least one until June 2006, and Red's re-introduction of the roster bonus, all hinted that Red is hedging his bets in the event that the sale of the Vikings to Fowler does not go through. And I suggested that Red's hedges appeared to be growing into permanent structures since the trade of Moss was finalized. Each of these maneuvers, after all, would allow Red to continue to maintain that he held the interests of the Vikings near and dear, while also ensuring that Red need not spend more than absolutely required in 2005, should the Fowler deal fall through.

And so, it seemed, the idea that Red knew something that Vikings' fans did not--namely, that the NFL was on the verge of vetoing the sale of the Vikings to the Fowler group--had some merit.

Though the sale of the Vikings' remains in limbo, and while, as a consequence, we are not able to assess the aforementioned theory that Red is hedging his bets against the sale of the team to the Fowler group, there now appears the possibility of a more sinister scheme. This scheme involves not Red, but the Fowler group, and the rest of the NFL.

LA Bound?

Several years ago, the State of Louisianna and the City of New Orleans devised a plan whereby the state and city would pay the New Orleans Saints to remain in New Orleans. The plan was great for the team and great for the NFL.

For the team, the state and city payout essentially guaranteed the type of return for the Saints that Red McCombs annually receives in Minnesota courtesy of a sold out Metrodome. The beauty of the deal for the Saints and owner, used car salesman Tom Benson, is that there was no need to put a winning product on the field. Oh, Benson could make the effort and he did spend some money--more than the Vikings did in the same period, at least--but he never had to concern himself with the bottom line, because the state and city ensured that the Saints would operate well in the black. And that was sufficient ground for Benson to ensure the state and city that he would remain in New Orleans.

For the NFL, the Saints' arrangement with Louisianna and New Orleans was like mana from heaven. Not only was someone guaranteeing the bottom line for one of its own, but they were doing so in a manner that ensured that one of the league's most coveted of grails remained without a suitor. That grail is LA.

Since the Rams moved to St. Louis and the Raiders moved back to Oakland, Los Angeles has been without a professional football team. And the NFL desperately wants to fill that void in the second largest television market. But it cannot fill the void if the void is filled by another. Which is why the NFL loved the Saints' arrangement, because the arrangement meant that Benson would not leave New Orleans for LA.

Where the Vikings Fit In

Since he purchased the Vikings in 1998, Red has lobbied the Minnesota Legislature for a new, publicly financed, football-only stadium. Red's lone bargaining chip throughout the "negotiations" was the threat to move the Vikings to LA. Minnesotans called Red's bluff and Red appeared to back down.

Red's retreat was finalized when Reggie Fowler appeared from out of nowhere to make a bid for the team that nobody imagined, least of all Red. The money was too good to pass on and Red agreed to sell the team to the Fowler group for a mere $350 million profit, rather than attempting to garner a more substantial profit by moving to LA

But the sale of the Vikings to Reggie Fowler's group immediately raised some red flags. Why have we never heard of Reggie Fowler? Is he another Tom Clancy? Is he another carpetbagger?

Fowler immediately moved to allay our concerns by scheduling a press conference and issuing some background material. Both moves only made Vikings' fans more pensive aobut the impending sale of the Vikings to the Fowler group. Fowler refused to answer questions about his financial wherewithal and offered false claims about his own background--claims which, although relatively inconsequential as they regard the sale of the Vikings to the Fowler group, raised the concern that Fowler might be a blowhard in areas that really matter if he was willing to be in areas that matter not a whit.

Most disconcerting of all, however, was the fact that, even if we accepted all of Fowler's contentions about his net worth--much of which appears to be based on leveraged enterprises--he would still rank among the bottom of NFL managing partners with respect to wealth. And that meant--and might mean--that every penny counts with Fowler. Following in the footsteps of a team owner who was unable to make the numbers work despite a $30 million plus net profit in 2003, and more in 2004, Vikings' fans had every reason to be concerned about the wealth of the prospective new owner.

Where the NFL Fits In

But through Fowler and McCombs, Vikings' fans were assured that Fowler had the money to serve as managing partner of a new ownership group. Moreover, we were told, the real value of the Fowler group was not in Fowler's financial contribution to the group, but in the financial wherewithal of the other members of the group. Fowler, after all, was merely the managing partner--the party who would call the shots and stand for photo ops.

That seemed odd for someone with as high a debt to asset ratio and as much of an apparent disagreement with public exposure as has Fowler, but at least it sounded mildly plausible. And Fowler and Red, in the little bit of information regarding Fowler's co-investors that they were willing to divulge, offered that Fowler's partners were "wealthy businessmen from out East."

And that's where the suspicion began to seep in a bit--the suspicion that there was more to this deal than Red wanting to sell the team or Fowler looking to buy the team. The suspicion that something more nefarious was at hand. And the suspicion that the NFL was busy at work behind the scenes.

The Conspiracy Theory

While it is no secret that NFL Commissioner Paul Tagliabue would like to see a minority-owned franchise in the NFL before he retires, this deal did not look like the ideal fit. There are several wealthier African-Americans than Reggie Fowler who appear both able and willing to make a run at ownership of an NFL franchise. So what gives?

What gives, one suspects, is that Fowler was willing to put up his relatively modest wealth and tie his fortunes to the NFL front office. And that, undoubtedly, set him apart from other potential minority owners.

But what appears increasingly plausible, as well, is that the NFL is making an end-run around Vikings' fans. And it is doing so by fronting a minority candidate for Vikings' ownership that it believes Minnesotans will refuse to turn against for fear of being labled racist. In so doing, the NFL is hoping that Fowler is the key to engineering Minnesota's public funding of a new stadium.

But that is merely the NFL's short-term plan; a plan that even the NFL might consider fanciful. For if Minnesotans don't bite--if they inherit an ownership group that pleads poverty in a manner that would make even Red blush and call the bluff, the NFL has a fall-back plan. And that plan is possible because the NFL is, this theory goes, the actual money behind the remainder of the Fowler group.

The suspicion is that the NFL is using Fowler to try to get a new stadium for the Vikings in Minnesota. This would drive up the value of the Vikings and allow the NFL to seek a higher franchise fee for an LA-based team. And that would mean more money for the league and its owners. Moreover, just by virtue of the sale of the Vikings to the Fowler group, a move that the league undoubtedly believes would boost the team's odds of securing public funding for a new stadium, the league will ensure a steady increase in team valuations, as the Vikings, without a new stadium, saw their value more than double in six plus seasons.

But the crowning jewel for the league is the LA market. And if the league has a Minnesota ownership group in its pocket--something it did not have in Red--it can ensure that no Minnesota group leaves the Minnesota market without kicking something back to the league. Ergo, if the reason that we know so little about Fowler's partners is that nobody wants us to link those partners to the NFL--as in, the league is essentially financing the other partners--the NFL will ensure its goals no matter how the stadium situation plays out in Minnesota.

If Minnesota builds a new stadium for the Vikings, the Fowler group can sell for a nice profit. The league will get a cut of the sale and see its franchisee valuations increase. If, on the other hand, Minnesota does not build a new stadium for the Vikings, the Fowler group, at the behest of the NFL, will move to LA. The league will then sell the team somewhere down the road and reap the return on the move to LA and will work with Minnesotans--as it did with the people of Cleveland--to ensure the return of professional football to Minnesota, at an astronomical franchise fee greatly increased by the Vikings' move to LA.

And all the discussion about whether Fowler has the means is merely part of the set-up. If the league openly suggests that Fowler's funds are tight--as it repeatedly has done--Fowler has a built-in excuse for being even more tight-fisted than was Red. And that gives Fowler even that much more leverage in lobbying for a new, football-only stadium and for the "necessary" revenues that it is certain to generate.

Up Next: Changing Locations.

6 comments:

Lichty said...

Does the NFL believe that it will be able to keep its interest in the franchise secret.

Because once they try to move the team before 2011, there will be a lawsuit to keep the team in the Metrodome and this will all come out through litigation in front of a homer judge.

Does the NFL care?

CDW said...

UNfortunately, this conspiracy sounds quite plausible. Even if the NFL is not directly behind the money backers for the Fowler group, I can picture the NFL execs mulling this situation over in their collective evil heads. For them this scenario must look like a win-win for them.

Vikes Geek said...

If the team were to move, the NFL would lose its interest in keeping its involvement in the franchise a secret. At that point, it would no longer care if it had alienated the Vikings' fans. Even a homer judge will acknowledge that the Vikings can break their lease--if the price is right. And the league may be quite willing to meet the price of breaking a rental agreement five years early, whereas Red was not willing to do so on his own.

I also believe, as cdw implies, that if the NFL had not thought of this scheme it should have. It certainly would be a win-win for the league.

VG

Anonymous said...

Announcing my bias - I have a firm belief that conspiracy theories such as this are 99%+ hogwash. It's not that easy to keep secrets when 100's of millions of dollars are being thrown around, and of course the 'NFL' (as if it were a single entity) has bylaws preventing ownership of teams. However, I have a more significant objection. Glen Taylor.

If the NFL rejects Fowler Taylor has already stated that he will match Fowler's deal. Red, for the same reason he accepted Fowler's should accept Taylor's (although he may not...different post). Taylor will have no trouble getting accepted by the NFL and is an ideal owner for keeping LA empty.

Remember, we are all in aggreement that the owners that make up the NFL want LA empty! The leverage it gives them on their local communities is far more valuable than the incremental increase in TV and gate revenue. Taylor is perfect. He's in a good position to negotiate a reasonable deal with the legislature (reasonable because he has less leverage than most due his native status and ownership of the Wolves), and that puts Minn. in the same situation as New Orleans.

Honestly, I think the difficulty that the NFL has is this. On one hand they have a minority owner, which they desperately want. But that owner is financially suspect, and may in fact try to move the Vikes to LA (which again is BAD for the NFL). On the other hand they have an ideal owner for their purposes, but he is a non-minority. I think there is a lack of concensus which is the reason for the foot-dragging.

Lou

Vikes Geek said...

Lou,

I agree with some of what you say but offer the following addendums:

1. Glen Taylor has never offered to match Fowler's bid. If he had, the team would be Taylor's. Taylor's bid was considerably lower than Fowler's--which is why Red took Fowler's bid--and contained several conditions related to progress on a new stadium. Red wanted no part of it. For its part, the league would love this deal to go through--even if it is not pulling the strings. While the league would like to have a minority owner, it is much more interested in the high bid that Fowler put forth--a bid that significantly drives up the value of all other teams in the league.

2. Not that it really matters, but the NFL, for legal purposes, is, of course, a single entity. That is the definition of a corporation. For legal purposes it is treated as a single person. It only makes sense, then, to discuss it as if it were a single entity. And, of course, it would be a bit odd if someone at NFL headquarters acted independently of the league--to the best of my knowledge, that's not how the NFL operates.

3. The NFL may own a team. And they must have that authority or they would be without recourse should a team's owner face insurmountable financial difficulties and need to be bailed out despite the lack of a willing market buyer. Remember the league's discussion about purchasing the Cardinals several years ago? This is similar to what MLB is doing with the Washington Senators.

4. Minnesota and New Orleans face different challenges. Both want new stadiums, but New Orleans is receiving a very healthy kickback to stay in the state--plus free rent. That makes LA less appealing to Saints' owner Tom Benson than it probably would be to the owner of the Vikings.

VG

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