Is Rob Walton Buying The Denver Broncos?!

Jun 7, 2022

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Hey Friends,

If you haven’t been following the business side of the NFL’s Denver Broncos for the last few months, you might be slightly confused at this point. So here’s a short recap:

Longtime Denver Broncos owner Pat Bowlen passed away in 2019.
Before his death, Bowlen created a three-person trust that would either (a) sell the team or (b) identify an heir from one of his seven children if he passed away.
The team was put up for sale after the courts decided several legal challenges were illegitimate, including an argument by the estate of the previous Broncos owner, Edgar Kaiser Jr., that they should have the first right of refusal on a sale.
Broncos President and CEO Joe Ellis has been leading the team's sale since January, receiving interest from more than six potential buyers.

And while NFL insiders like Adam Schefter are reporting that second-round bids were due yesterday, it looks like a favorite might be emerging from the group.

Forbes reports that Walmart heir Rob Walton is set to buy the Broncos for a winning bid of $4.5 billion, according to sports bankers the outlet spoke to. They say that an announcement could come as early as this month, and the bid includes Walton’s daughter Carrie and her husband Greg Penner, the current chairman of Walmart.

Now, to be clear, this isn’t a done deal yet. Forbes may be reporting that Rob Walton is the favorite, but several others have said that the winner hasn’t been selected.

Still, I think all signs are pointing toward Rob Walton at this point. Not only is he worth more than 4x the other three big group leaders combined, but an offer of $4.5 billion would be far and away the highest price ever paid for a US sports franchise.

**Denver Broncos bidders (ranked by net worth*)**

Rob Walton: $58.8 billion
Josh Harris: $5.7 billion
Mat Ishbia: $4.5 billion
Jose E. Feliciano: $3.4 billion

*Unclear if Todd Boehly will remain in the bidding process after acquiring Chelsea FC (source)

Highest Sports Team Sales In History

Brooklyn Nets: $3.2 billion
Chelsea FC: $3.1 billion
New York Mets: $2.4 billion
Carolina Panthers: $2.2 billion
Houston Rockets: $2.2 billion
Los Angeles Dodgers: $2.15 billion
Los Angeles Clippers: $2 billion
Manchester United: $1.5 billion

But beyond price, there are a few other reasons why I think Rob Walton will probably acquire the Denver Broncos. First, the NFL generally likes single entity owners that can write a big check. For example, Andrew Brandt told me on my podcast last week that there were larger offers for the Carolina Panthers than the $2.2 billion that David Teper eventually paid but that the NFL and its owners preferred him as the owner because his bid wasn’t leveraged and required no outside financing.

“No one could write a check like David Tepper,” says Andrew Brandt.

And secondly, while the NFL has a salary cap that limits the ability of a wealthy owner to come in and spend lavishly to win championships, being an owner with outsized wealth still brings several advantages to the table.

For example, a funding rule in the NFL’s CBA requires owners to place any future guaranteed money above $15 million into an escrow account. That means if a player signs a contract with $100 million in guaranteed money, the NFL team would be required to place $85 million in an escrow account that can’t be touched.

That’s not a problem for someone like Rob Walton ($58.8 billion net worth), but as NFL contracts continue to grow in size, it could be a disadvantage for family-owned and operated NFL franchises like the Cincinnati Bengals and Pittsburgh Steelers, who don’t have access to nearly the same amount of cash that someone like Walton does.

NFL’s Wealthiest Owners

Rob Walton (Broncos*): $58.8 billion
David Tepper (Panthers): $16.7 billion
Stan Kroenke (Rams): $10.7 billion
Jerry Jones (Cowboys): $10.6 billion
Robert Kraft (Patriots): $8.2 billion

*Assuming that Rob Walton eventually becomes the owner of the Denver Broncos.

And last but not least, I think it’s clear why Rob Walton might want to buy the Denver Broncos. Not only is it incredibly fun (I imagine!), but it’s also a great investment.

The average value of an NFL franchise has grown 722%, from $423 million in 2000 to $3.48 billion in 2021 — that’s a CAGR of 10.56%. And once you add in the fact that NFL teams will now receive $300 million each year (for the next decade) in TV money from the NFL’s new $110 billion media deals, it becomes an even better investment.

So we’ll see what happens. But don’t be surprised if Walmart heir Rob Walton ends up acquiring the Denver Broncos and if the purchase price sets a new all-time record.

As always, I hope you have a great day. We’ll talk tomorrow.

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