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Khan seeks to join exclusive club
Shahid Khan seeks to join exclusive club as owner of the St. Louis Rams
BY JIM THOMAS
ST. LOUIS POST-DISPATCH
By the end of May at the latest, Shahid Khan will learn whether he has gained admission into one of the wealthiest, most exclusive and, at the same time, most eclectic clubs in America as one of the 32 controlling owners of a National Football League team.
"It is kind of a strange group," said a league insider. "Very strange. You know the group."
It's a group that will convene Monday in Orlando, Fla., for the NFL's annual owners meetings, where Khan's bid to buy the Rams will be one of the items discussed.
Among the exclusive club of owners, there's the old guard, such as the Halas/McCaskey family, which has been involved with what is now the Chicago Bears since the inception of the NFL in 1920.
The Mara family founded the New York Giants in 1925, when Tim Mara (who was a bookmaker, among other things) and partner Billy Gibson bought the team for $500. The Maras have owned all or part of the franchise ever since.
The Cardinals franchise, now based in Arizona and led by the shy Bill Bidwill, has been in the Bidwill family since 1932. In Pittsburgh, the Rooney family founded the Steelers with a $2,500 purchase on July 8, 1933.
In Oakland, age is catching up with one of the league's all-time mavericks, Al Davis. He shows up for league meetings wearing either an all-white or all-black workout suit, now needing the use of a walker to get around. Then there's the frugal Mike Brown of Cincinnati, son of the late Paul Brown, a legendary coach and owner.
There's also a new group of owners who entered the league beginning with the last wave of expansion in 1995. Wayne Weaver of the Jacksonville Jaguars made his money in shoes, rising through the ranks of the St. Louis-based Brown Group Inc. Paul Allen of the Seattle Seahawks co-founded Microsoft with Bill Gates in 1976.
The Philadelphia Eagles' Jeffrey Lurie once was an assistant professor at Boston University. Steve Tisch, who owns half the New York Giants (the Mara family still owns the other half), may be the only person on the planet with a Super Bowl ring and an Academy Award (as co-producer of "Forrest Gump").
Many of the owners inherited their fortunes. Some made theirs from humble beginnings. After Arthur Blank and friend Bernie Marcus were fired by the Handy Dan home-improvement chain in California in 1978, they opened a couple of similar stores in 1979. Thirteen-hundred Home Depot stores later, Blank bought the Atlanta Falcons in 2002.
Maryland businessman Steve Bisciotti was only 39 when he bought 49 percent of the Baltimore Ravens in 2000. (He purchased an additional 50 percent of the team four years later.) When he opened his first business, the staffing company Aerotek, with cousin Jim Davis not long out of college, their office consisted of two used desks purchased from Goodwill and an orange shag rug held together by duct tape in the basement of a rented townhouse in Annapolis.
When it comes to living out the American dream, Khan, an Urbana, Ill., billionaire, should fit right in. A native of Pakistan, Khan arrived in the United States at age 16. He used his industrial engineering degree from the University of Illinois in 1971 to develop a one-piece automobile bumper with no seams to rust.
It became the industry standard and allowed Khan to buy the auto parts manufacturing company (Flex-N-Gate) that he once worked for and go global.
Khan already knows several NFL owners, Detroit's Bill Ford and Chicago's Michael McCaskey among them.
"At this level, they generally know a lot about who this person is, I think just by business connections," said the league insider, who did not want to be identified. "I mean, there aren't all that many billionaires in the country."
While Khan's bid to buy controlling interest in the Rams will be discussed at the owners meetings this week, by no means will it be a major topic of conversation. At least not yet.
The NFL's finance committee, as part of its normal report to the full league membership, will provide a brief update on the Rams' ownership situation.
Since Khan entered into a sale agreement Feb. 12 to buy 60 percent of the Rams from majority owners Chip Rosenbloom and Lucia Rodriguez, there have been several developments:
— Various league staff workers have commenced the evaluation of the proposed sale, and recently briefed the finance committee on the status of the transaction.
— Khan's background is being investigated to make sure he has no felonies, no gambling ties, in short, no red flags in terms of character.
— Forensic accountants and/or investment bankers are vetting Khan's net worth to make sure he has the money to pull this off. His 60 percent purchase is based on an overall Rams franchise value of $750 million.
— Most important, Khan has met on several occasions with Stan Kroenke, who owns 40 percent of the Rams. A league source familiar with the sale said Khan and Kroenke are getting to know each other. "I think they both like each other," the source said.
That is important because at the moment Kroenke remains the wild card in the Khan purchase. Once Khan entered into the sale agreement, Kroenke was given 60 days to declare his intentions.
Kroenke could "cash out," deciding to sell his 40 percent of the team.
He could simply stand pat, keeping his 40 percent as Khan goes forward with his 60 percent purchase.
Or Kroenke could try to exercise a right of first refusal and attempt to buy 100 percent of the team.
But since entering into a purchase agreement with late owner Georgia Frontiere in 1995, Kroenke has bought the NBA's Denver Nuggets and the NHL's Colorado Avalanche. Current NFL cross-ownership rules prohibit a majority, or controlling, NFL owner from also owning major-league baseball, basketball or hockey teams in competing NFL markets.
All indications are that Kroenke will stand pat at 40 percent. But until his intentions become official, there's only so much for league owners to discuss. There can be no final transaction agreement for the NFL finance committee to investigate and approve until it is known whether Khan ends up purchasing 60 percent or 100 percent of the team.
Similarly, Khan must appear before the finance committee to answer any questions that it might have for him. But again, that can't happen until Kroenke declares and the final transaction agreement is in place. Kroenke's 60-day window to make a decision expires on or around April 12.
Once Kroenke declares, it's expected it will take about another month to close the sale, have the finance committee recommend the sale for approval to the full league ownership, and then have three-fourths of the league's 32 teams vote in favor of the sale. That could push things into May, and at the latest to the NFL's spring owners meetings May 24-26 in Dallas.
And it's at that time when Khan will know for sure whether he'll be welcomed in as the newest member of one of the nation's most exclusive clubs.
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