Rooneys earn NFL owners' blessing, 31-0
IRVING, Texas -- Dan Rooney said his goal always has been to keep the Steelers in the Rooney family. Wednesday afternoon, the NFL gave him a fighting chance to do just that.
The league's owners approved Rooney's plan for restructuring Steelers ownership by a vote of 31-0 at the Four Seasons Resort and Club. There was one abstention at the owners' meeting.
If final details can be worked out, the owners' blessing will consolidate control of the Steelers in the hands of Dan Rooney and his son, team President Art Rooney II. It brings the franchise in compliance with NFL policies mandating that a principal owner control at least 30 percent of a club's shares and bylaws banning partners from holding casinos, an increasingly lucrative part of the Rooney family's earnings.
"It was a lot of work, and everybody put forth the effort," Dan Rooney said. "It wasn't a slam dunk strictly for the Rooneys. This was something the league felt was good for them."
The deadline for the deal to become final is March 31, a date set by Dan Rooney's four brothers. The five brothers each hold a 16 percent cut of the fabled franchise; the related McGinley clan controls the remaining 20 percent.
Two brothers -- John and Art Rooney Jr. -- will remain minority partners of the team. Steelers Chairman Dan Rooney will hold 20 percent, and Art II will receive 10 percent. The NFL will allow Dan and Art II to be treated as one person owning 30 percent of the team.
"I don't feel any different tonight than before," said Florida racing tycoon Patrick Rooney, one of the brothers who relinquished his share in the team. "The deal has to be completed for me to feel any differently. The only thing that happened today was that the league wanted to give it to Dan, but we always knew the league would approve that. We expected that.
"What's next is for all the investors to come out."
The NFL owners yesterday approved three minority investors that Dan and Art II lined up with the help of Wall Street investment house Goldman & Sachs: James Haslam III, 54, of Knoxville, Tenn.; Thomas Tull, 38, of Los Angeles; and five members of the Paul family, which is based in Pittsburgh and Los Angeles. None of the new investors could be reached for comment.
Haslam runs the Pilot Travel Centers, convenience stores and truck stops that dot the American landscape.
Tull's Legendary Pictures is a Hollywood titan. With Warner Brothers, Tull -- a native of upstate New York -- has helped to produce or finance a string of hit flicks, including the recent Batman films, "Superman Returns" and the teary "We are Marshall."
Led by Robert Paul, 71, the Paul family's enterprises include metal fabricating giant Ampco-Pittsburgh, TV and radio holdings, banks, restaurants and fitness clubs. According to a Steelers' news release, the deal will bring in Paul's wife, Donna, and their children, Larry, 44, Stephen, 41, and Karen Zimmer, 39.
Art Rooney II said he and his father are still putting together their corral of investors, but most of the financing is completed. Oakland's Rita McGinley, 86, told the Trib she plans on keeping her 10 percent stake.
"They told us that they were trying to get 17 partners. By my count, they need six more," said Art Rooney Jr., Dan's brother.
Dan Rooney and his son will incur $250 million in debt -- that is $100 million more than the NFL normally allows -- and their shares in the Steelers will be used as collateral for their loan orchestrated by PNC Bank.
A previous $840 million cash tender for the team by Steelers fan and hedge fund billionaire Stanley Druckenmiller collapsed in September. It would have made the Steelers the only franchise in the NFL without a penny of debt.
Despite taking on a large amount of debt in queasy economic times, Dan and Art II said it won't compromise the Steelers' ability to compete financially or affect the product they put on the playing field. The Steelers could explore tapping other forms of revenues, and Art II refused to rule out raising ticket prices to fund the loan.
But, he added, "We don't plan to make any dramatic changes to the way we operate. We wouldn't have (put together a buyout plan) if we didn't think we would be able to handle it."
Art Rooney II said the other NFL owners did not attach any contingencies to the reorganization plan.
Although the potential sale of the Steelers became known publicly in July, NFL Commissioner Roger Goodell said talks of restructuring started three years ago.
"The initiative frankly was that they had changed their business operations and the gambling operations had gone more into gambling," Goodell said. "It was a greater concern to us than the original horse racing and dog racing. I think estate planning was an issue for them also."
The four Rooney brothers did not want their children to get saddled with the prohibitive estate tax if their shares in the Steelers were passed down.
For the league, however, Dan Rooney's buyout bid comes with the possibility of labor strife after the 2010 season, when the Collective Bargaining Agreement with the National Football League Players Union expires.
In Washington, union spokesman Carl Francis said the players wouldn't take a stand on the Steelers' debt package or any other waivers issued to franchises to exceed the league's $150 million debt ceiling -- so long as the Steelers' owners adhere to rules on salary cap spending.
"We've been in favor of a policy that allows teams to take on more debt, particularly if that allows them to sign or re-sign players to remain competitive," he said.
NFL owners conceded the Steelers deal came during tough economic times, but said they trusted Dan Rooney and his track record of winning on the field and in the boardroom.
"We've looked at it very positively and hope they can get everything worked out," said Houston Texans owner Bob McNair. "It's a tough environment to be doing it, but it looks like they're going to get it worked out."