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Steelers on the Block?

According to an article in this morning's Wall Street Journal, Pittsburgh Steelers CEO Dan Rooney is in talks with his brothers to buy out their interest in the club so that he will become the principal owner. Rooney wants to preserve the family's 75 year ownership of the club and his four brothers do not have the same interest in maintaining ownership of the team as he does.

Rooney's plan, however, may result in a sale of the entire ownership interest in the Steelers to an outsider if a bid is made that results in a substantially higher price than Rooney is prepared to pay. Stanley Druckenmiller, billionaire chairman of Duquense Capital Management, longtime Steeler fan and the former chief trader for legendary hedge fund manager George Soros is has expressed an interest in buying the team.

The Steelers are blessed with a relatively new stadium in Heinz Field and a fanatically loyal fan base. Pittsburgh, however, is the classic Rust Belt town with little growth and departing or dying industrial and corporate base presenting the club with shrinking sponsorship opportunities. The Wall Street Journal estimates the club's value at something less than $800 million, while Forbes valued the team at just over $900 million. The truth is likely somewhere in between, although it may well depend on whether Rooney or Druckenmiller is doing the buying. Rooney should get a lower purchase price as he is buying minority interests, which should be subject to a minority interest discount.

Full post as published by Sports Biz on July 08, 2008 (boomark / email).