Rooney brothers key to Steelers ownership fight
Updated: July 11, 2008, 8:45 PM EST http://msn.foxsports.com/nfl/story/8327 ... ship-fight
PITTSBURGH (AP) - Pittsburgh Steelers chairman Dan Rooney faces an uphill climb in trying to acquire majority control of one of pro sports' best-known franchises now that his four brothers have hired an investment firm to field offers for their shares of the club.
On Thursday, billionaire Stanley Druckenmiller, the chairman of Duquesne Capital Management, acknowledged for the first time he is involved in trying to buy into the team.
Dan Rooney, widely viewed as the NFL's most influential owner, has spent two years in an unsuccessful attempt to buy out his four younger brothers' stakes in the five-time Super Bowl championship franchise. Each brother owns 16 percent, or a total of 80 percent.
The other 20 percent is owned by the family of the late Barney McGinley, who helped Steelers founder Art Rooney Sr. reacquire the Steelers in the 1940s after Rooney sold the team for a brief time. The McGinleys' share is not believed to be for sale.
To prevent an outside investor — most likely, Druckenmiller, a longtime Steelers fan — from obtaining a majority stake, Dan Rooney needs to persuade at least one brother to sell to him.
That would give him 32 percent of the team, enough to satisfy the NFL's requirement that the primary owner have at least a 30 percent share. If the McGinleys don't sell, no other investor could own more than 48 percent.
In a statement, Druckenmiller said the Rooneys are "working through a number of complicated issues regarding the ownership structure. .. I have been involved in these discussions and am interested in participating in a transaction that builds on the legacy of this great franchise and one that makes economic sense to everyone involved."
Dan Rooney would continue to run the Steelers even if Druckenmiller buys a majority share but, for the first time, would do so without his family controlling the ownership.
Art Rooney Jr., who helps run the Rooneys' real estate holdings, is the only other Rooney brother who lives in Pittsburgh. He said his three out-of-town brothers are loyal Steelers supporters who dislike being part of any possible disruption of the Rooney family's ownership.
"We bleed black and gold," Art Rooney Jr. said at a signing for his new book about Steelers founder Art Rooney Sr. and the family. "What bothers me is I hear people say the out-of-towners (the Rooneys who don't live in Pittsburgh) don't love the Steelers. They love the Steelers."
Still, Art Jr. finds it ironic he may decide if the Rooney family keeps the Steelers, given his falling out with Dan.
In a curious twist, Art Jr., a Pro Football Hall of Fame nominee for his drafting skills who was fired by Dan Rooney 21 years ago, may decide if the team stays in the Rooney family's control.
Art Jr., the only other Rooney brother who worked full time for the team, was so skilled as a scouting director that his drafts in the late 1960s and early 1970s were largely responsible for the Steelers winning four Super Bowls in six years.
His 1974 draft alone produced Hall of Famers Lynn Swann, Jack Lambert, John Stallworth and Mike Webster and led to Art Jr. being nominated for the Hall of Fame.
After the Steelers drafted only two Pro Bowl players from 1978-86, Dan fired his bother in 1987 as the scouting and player personnel chief, and Art Jr. has not been involved in the Steelers' football operations since.
"How about that? I've become a big shot after being exiled 20 years ago," Art Jr. told KDKA-TV.
However, Art Jr. called the current ownership crisis "sad," although he said his father would understand the brothers' desires to be properly compensated for their shares.
A revamping of the ownership group is needed because the Rooney family runs race tracks in Florida and New York that now offer video slots and other forms of gambling not permitted of NFL owners.
A troubling sign for Dan Rooney is that his brothers — Art Jr., Tim, Pat and John, all of whom will be at least 70 by next year — retained Goldman Sachs & Co. to weigh offers. Their shares are likely worth more than Dan Rooney and son Art II, the team president, could raise and still remain under the NFL's ceiling of $150 million in ownership debt.
The brothers likely would not have retained Goldman Sachs if they felt they could soon work out a deal with Dan Rooney. The move also reflects their fears that selling to Dan Rooney, coupled with the ensuing taxes, could leave their children and grandchildren with far less money than their shares are worth.
If any of the brothers were to die in the near future without a change in ownership, their heirs would face estate taxes of up to 45 percent of the shares' value.
A year ago, Forbes Magazine valued the Steelers at slightly less than $1 billion — quite a return on Art Rooney Sr.'s initial investment of $2,500. Each Rooney brother's stake is worth about $160 million, or less than Dan Rooney is believed to be offering.
Dan Rooney has been working with Morgan Stanley and PNC Financial Services to attempt to bring in additional investors who might prop up his buyout attempt. Rooney hopes that former NFL commissioner Peter Tagliabue, who is representing the league in the matter, may help work out a deal.
The NFL supports Dan Rooney's attempts to keep the team in the Rooney family, not surprising given how Art Sr. and Dan Rooney have been among the most influential figures in league history. Both are in the Pro Football Hall of Fame.
"The league will continue to support the Rooneys in their efforts to retain control of the Steelers," NFL spokesman Greg Aiello said Thursday.
Dan Rooney does not necessarily need to own 50 percent or more of the club to continue to operate it. Among his closest friends are the Mara family, which runs the Super Bowl champion New York Giants although it shares a 50-50 ownership split with Steve Tisch, the son of former co-owner Robert Tisch.
Druckenmiller has long coveted the Steelers and first tried to buy into them 10 years ago. He is believed to want only financial control, not day-to-day control of the club's operations.
"One can only be in awe of the way this franchise has been operated for many decades," Druckenmiller said in his statement.