Saturday, May 31, 2014
Will Clippers' sale affect Bills' price?
By Mike Rodak
When the Los Angeles Clippers were sold earlier this week to former Microsoft CEO Steve Ballmer for an NBA-record $2 billion, it in some ways set the deck for the Buffalo Bills' sale later this summer.
The Bills will be the next major North American professional sports team to be sold. Erie County Executive Mark Poloncarz, who negotiated the Bills' most recent stadium lease and has some knowledge of their pending sale, believes the Clippers' sale could affect the Bills' purchase price.
"We were expecting the Bills would sell somewhere in the vicinity of $800 million to potentially a billion dollars. Maybe it will go higher now," Poloncarz told WBEN radio Friday. "I don't think it will go for $2 billion because this is not the Los Angeles media market, but it certainly could go above a billion dollars if this precedent in regards to recent NBA sales is any indication. We'll just have to keep an eye on it."
The Bills' financial and legal counsel will likely begin contacting potential bidders within the next several weeks. There are currently three groups publicly known or reported to have interest in bidding: Tom Golisano, the former Buffalo Sabres owner; Donald Trump, the billionaire businessman; and Jon Bon Jovi and Larry Tanenbaum of Toronto-based Maple Leafs Sports & Entertainment. The expectation is that a half-dozen or more parties will bid for the team.
As we've noted previously, any new owner would have extreme legal difficulty moving the Bills before 2020. However, there is a one-time buyout clause in the Bills' stadium lease that would allow the team to move in early 2020.
That leaves open the possibility of a new owner "sitting" on the team for the next six years while getting his ducks in a row to move elsewhere.
"Truthfully, there are parties that are interested in buying the team and moving it," Poloncarz told WGR 550 on Thursday. "We are trying to do what we can on our part to show that this community is moving forward to at least explore everything and all the options that are necessary, in the case the situation comes that we have a new owner that says, 'I own the Bills. I'm fine with Ralph Wilson Stadium for the next five or six years, but I want out and I want to be somewhere different then.'"
The burning question about the Bills' sale is whether Ralph Wilson's estate, which according to Poloncarz is a four-person trust that includes Wilson's widow, Mary, will simply accept the highest bid or choose a bidder who wants to keep the team local.
"I've spoken to [Bills CEO Russ] Brandon, I've spoken to [Bills CFO Jeffrey Littmann]. They know my request, which is to pick the owner that's going to keep the team in Buffalo. But I don't know if that's going to be the decision that the trustees will end up doing," Poloncarz told WBEN. "If they end up getting a bid that's so much higher than anybody else, I don't know if they can turn it down. They may have the fiduciary duty to accept it."
Brandon had previously declined comment about the wishes of Wilson's trust.
"That's a good question," Brandon told WGR 550 on May 21. "I'm not at liberty to talk about those things. I can't talk about that."
In the case of the Clippers, Ballmer's bid was nearly four times that of the next-highest NBA franchise sale price ($550 million for the Milwaukee Bucks) and was $400 million more than the next-highest bid for the Clippers.
Ballmer will keep the Clippers in Los Angeles -- as Poloncarz noted, it's a lucrative media market -- but could something similar happen in Buffalo where a group makes a bid substantially higher than the rest, and intends to move the team? It's possible.
Ultimately, sorting between what's possible and what's likely with the Bills' sale is a challenge. Each party keeps its intentions close to the vest, and as we saw with the Clippers' sale, surprising developments have a tendency to happen swiftly and without warning.