As the Broncos move towards a possible sale of the team in 2022, a twist has emerged.
Via Andrew Beaton from the Wall Street newspaper, a Canadian holding company claims to have a right of pre-emption as to any club purchase.
The claim sparked a lawsuit from the Broncos, filed in an attempt to obtain a court ruling on the rights of the parties. It’s Pat Bowlen’s domain on one side and Edgar Kaiser’s on the other. The Kaiser estate is joined by Scott Schirmer, an Arizona businessman who, along with the Kaiser estate, owns ROFR Holdings, Ltd. Given the initials chosen by the company, it appears that it was created solely for the purpose of exercising the supposed right to match any offer made to and accepted by Bowlen’s estate for the team.
Kaiser held a right of first refusal in connection with the sale of the franchise to Bowlen in 1984. Kaiser and Bowlen previously fought over an offer from Bowlen to sell 10 percent of the team to John Elway, with an option to double his. position. Kaiser asserted that his right of first refusal would have applied to such a transaction. Bowlen ultimately won the fight in court.
To fund the litigation, Kaiser borrowed money from Schirmer, who now owns part of the holding company that allegedly holds the right of first refusal.
Although Beaton writes that a resolution of the action is expected shortly after the start of 2022, appeal rights would bind the case at the start of the new year. The more important question is whether the situation will slow down efforts to buy the team.
At first glance, one might argue that it will be more difficult to solicit bids if potential buyers know that at the end of the day, they could negotiate a deal that someone else will strike and match. On a deeper level, this could help push the price up to a point that will make it more difficult for anyone to match the eventual price.
Then there is the issue of league approval. The traditional selling process involves getting enough “yes” votes from other Club Oligarch members. If they approve a new owner of Broncos and then the right of first refusal is exercised, what happens?
It’s also possible that Kaiser’s and Schirmer’s estate may wish to monetize the asset, finding someone who would offer more money when the club is essentially up for auction without the hindrance of a potential right of first refusal.
The fact that this question exists even so many years after Bowlen bought the team is a reminder to the NFL that its tendency to micromanage these transactions should extend to any back-end transactions that could blow up future efforts to sell. all or part of a franchise. Regardless of how the situation unfolds, this is a complication that potentially prevents the NFL from getting what it wants – a property situation in Denver that consists of one person, duly approved by the members. , which totally and totally controls the franchise.