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Rams' owners agree to sell team to Illinois businessman

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  • Rams' owners agree to sell team to Illinois businessman

    Rams' owners agree to sell team to Illinois businessman
    Shahid Khan is owner of large auto parts corporation based in Urbana
    By Howard Balzer
    Thursday, February 11, 2010

    The sale of the Rams took a major step Wednesday when the learned from sources close to the team that an agreement had been reached with Illinois businessman Shahid Khan to buy the team.

    Khan is expected to purchase the 60 percent of the team which is owned by Chip Rosenbloom and his sister, Lucia Rodriguez. The total value of the team has been placed at between $725 and $750 million.

    Rosenbloom would not comment on the report when reached by to the Globe Democrat late Wednesday.

    It is not known whether Khan has any other partners, but he is believed to be prepared to purchase 100 percent of the team if 40-percent owner Stan Kroenke elects to sell his shares.

    Khan is the president and owner of Urbana-based Flex-N-Gate Corporation (FNG), which has more than 9,500 employees at 48 manufacturing and nine product development and engineering facilities not only in the United States but four other countries. Company revenues are estimated at between $500 million and $1 billion annually.

    The company has numerous products, according to its website, that includes large body and chassis structural assemblies; full bumper and fascia systems, brackets, receiver hitches; interior plastic panels and pillars; exterior trim components, running board systems; scissor and screw jacks, tools, spare tire hoists, hinges, checks, pedals, parking brakes, and latch systems.

    Khan was an engineering student at the University of Illinois when he started working for FNG in 1970. He graduated in 1971 and helped develop a one-piece bumper starting in 1972. He stayed at FNG until 1978 when he started his own company. Two years later, he bought FNG.

    A sale would have to gain approval of 75 percent of the league’s owners.

    There is a question of how the owners will view tax issues Khan has had with the IRS. Over a period of several years, Khan and his wife Ann were investigated for allegedly sheltering hundreds of millions of dollars from income tax.

    In January, 2009, Khan told The News-Gazette in Champaign-Urbana he and his wife paid about $68 million that was in dispute and added that he would seek to get the money back in litigation.

    In fact, the Khans filed two lawsuits last July, claiming they were misled by financial advisers who knew the government was investigating similar tax shelters as being potentially illegal, but told the Khans what they were doing was legal.

    Ironically, some motions in the cases are scheduled to be heard in Champaign County Circuit Court on March 23 at the same time NFL owners will be in Orlando for their annual meeting.

    It is possible some in the league have been made aware of the issue in the initial vetting process by Goldman Sachs.

  • #2
    Re: Rams' owners agree to sell team to Illinois businessman

    I don't really think any NFL Owner is going to have a problem with someone fighting the IRS.

    It'll probably get him more 'yea' votes.;)


    • #3
      Re: Rams' owners agree to sell team to Illinois businessman



      • #4
        Re: Rams' owners agree to sell team to Illinois businessman

        Originally posted by ScottD413 View Post


        Lol, beat me to it.


        • #5
          Re: Rams' owners agree to sell team to Illinois businessman

          Haha when I first heard this, I knew there was going to be a Trek joke


          Related Topics


          • Varg6
            Proposed Rams buyer has had IRS issues
            by Varg6
            Per Mike Florio...

            The mere fact that Rams owners Chip Rosenbloom and Lucia Rodriguez have found a buyer for 60 percent of the franchise doesn't mean that the proposed buyer ultimately will acquire control of the team. Ultimately, 24 of the league's 32 owners must approve the transaction.

            And there's already cause for concern regarding the viability of Shahid Khan's bid.

            Howard Balzer of reports that Khan and his wife have been investigated by the IRS for allegedly sheltering "hundreds of millions of dollars" from income taxes.

            Last year, Khan and his wife reportedly paid roughly $68 million to resolve the claims, and the couple has since filed two lawsuits claiming that they were misled by financial advisers regarding the tax shelters.

            As Balzer points out, legal proceedings in the cases will occur on March 23, just as owners are convening in Orlando for their annual meetings.

            The impact, if any, on the approval process isn't known. But it's safe to say that the league will look closely into the situation before giving the green light to the transaction.

            -02-11-2010, 01:49 PM
          • larams1980
            Rams deal critical to the NFL
            by larams1980
            The success of the agreed upon deal to sell controlling interest of the St. Louis Rams to Illinois businessman Shahid Khan is going to be a leading indicator of the relative financial health of NFL franchises and a barometer of the future health of the league as a whole as it heads into a year of labor strife. The deal, which will not be formally presented to ownership until the owners’ meetings in late March, will clearly be the second biggest business issue, after the state of labor relations themselves.

            Khan, the 55-year-old president of Flex-N-Gate Corp., a manufacturing company that makes pickup truck gates, is offering a deal, according to informed sources, that puts the total value of the Rams at around $750 million. That’s less than the franchise’s Forbes valuation of $913 million but more than what other bidders have offered to date for the franchise. The Rams do not own their own stadium, but they have a favorable lease with St. Louis, are considered moveable and need to be sold to pay inheritance taxes.

            Death and taxes

            Khan needs only to acquire the 60 percent of the Rams that had been owned by the late Georgia Frontiere and is now held by her children, Chip Rosenbloom and Lucia Rodriguez. The other 40-percent share is owned by Stan Kroenke, who is currently prohibited by NFL rules from taking control of the franchise because of his ownership of the Denver Nuggets and Colorado Avalanche. Kroenke has been quiet on his intentions, but for the moment, he’s believed to be standing pat.

            Chip Rosenbloom and Lucia Rodriguez APChip Rosenbloom and Lucia Rodriguez currently own 60 percent of the Rams franchise.

            For their part, Rosenbloom and Rodriguez have been dealing with an inheritance-tax situation since the January 2008 death of their mother. Sources say the IRS valued the Rams at $800 million at that time. This would have presented Frontiere’s heirs with a potential taxable estate of nearly $400 million based on the increase in value of the Rams during Frontiere’s nearly 30 years’ ownership. Frontiere took control of the Rams after the death of her sixth husband, Carroll Rosenbloom, in 1979. In other words, the two Frontiere heirs have a tax bill of nearly $200 million.

            Very few people have the kind of wealth to absorb a $200-million tax hit and keep control of their football team, and Rosenbloom and Rodriguez aren’t among them. They reportedly pursued loans and sought other investors to maintain control and perhaps sell the team at a more advantageous moment. But with last year’s financial crisis and the downturn in the economy that followed, the Frontiere heirs have no real choice but to sell now rather than wait for a recovery that may be slow in coming. While Rosenbloom and/or Rodriguez will not get to keep the team, both will walk away very well off from its sale, pocketing about $100 million each.

            Lower franchise values bonus in labor talks,...
            -03-01-2010, 12:23 PM
          • Ramblin` Ram
            Khan seeks to join exclusive club
            by Ramblin` Ram
            Shahid Khan seeks to join exclusive club as owner of the St. Louis Rams

            BY JIM THOMAS

            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...
            -03-21-2010, 07:14 AM
          • r8rh8rmike
            St. Louis Rams Owners Weighing 3 Offers
            by r8rh8rmike
            St. Louis Rams owners weighing 3 offers

            By Jim Thomas

            St. Louis Rams owners Chip Rosenbloom and Lucia Rodriguez are closing in on a decision to accept one of three offers to purchase the team or walk away from the bidders and keep the franchise, league sources told the Post-Dispatch on Tuesday.

            A decision could be reached before the NFL draft in late April, not because of any kind of firm deadline, but simply to avoid uncertainty surrounding the team and its future entering the 2010 season.

            All three offers, described as "acceptable" by the sources, are comparable to what the Pittsburgh Steelers franchise recently sold for — which was in the range of total franchise value of $720 million to $800 million.

            The only known bid for the team is from a group of investors headed by St. Louis Blues hockey chairman Dave Checketts. The identity of the other two bidders remains unknown, although one was a relative late-comer in the process.

            The three bidders are committed in varying degrees to keeping the franchise in St. Louis, and that may have an impact on any sale decision.

            Rosenbloom and Rodriguez own 60 percent of the franchise, which they inherited from their late mother, Georgia Frontiere. Frontiere died on Jan. 18, 2008 — two years ago Monday — after a long battle with breast cancer. It is that 60 percent of the team that is for sale.

            Stan Kroenke owns the other 40 percent of the team.

            But at least one of the bids is for the full 100 percent of the team, in which case Kroenke's share would be bought out as well. But if Rosenbloom and Rodriguez end up selling only their 60 percent of the team, Kroenke could potentially scuttle the deal by saying he wants to "cash out," or sell his share of the team as well. If that's the case, the 60 percent investor may not have enough money to buy the full franchise.

            Those close to Rosenbloom say he has yet to get any indication from Kroenke on what he will do, although there have been signals from the Kroenke camp that he will simply hold his 40 percent share of the team if Rosenbloom and Rodriguez sell their 60 percent.

            Kroenke also has matching rights on any outside offers for the team. But under current NFL cross-ownership rules, he would not be allowed to exercise that right as long as he owns majority shares of the Denver Nuggets NBA team and the Colorado Avalanche NHL franchise. Kroenke also owns 29.9 percent of the English soccer club Arsenal, a team valued at $1.2 billion.

            Some clarity could be added to the issue this week. The Rams' brain trust is meeting in Los Angeles today and Thursday for the team's annual end-of-season summit meeting. Kroenke is expected to attend at least one day's worth of the meetings. If Kroenke indicates that he's on board with any...
            -01-19-2010, 09:48 PM
          • Varg6
            Diversity, money are key issues with Khan's Rams bid
            by Varg6

            By Bernie...

            Now that Shahid Khan has signed off on a deal to purchase majority ownership of the Rams, it will be fascinating to watch how the NFL receives him.

            If approved by NFL owners, Khan would become the first minority owner in control of a franchise in league history.

            Khan, born in Pakistan, came to the U.S. in 1967 at age 16. He became a U.S. citizen, was educated at the University of Illinois, built a hugely successful auto-parts manufacturing company, raised a family and has lived in central Illinois for 40 years.

            But we're reminded that the NFL is a private club, with only 32 lead owners/members. That point was underlined in a story that appeared in Saturday's Post-Dispatch.

            This passage caught my attention: "As one observer familiar with the process emphasized, it's more than just a matter of money. Using the analogy of an exclusive tennis club, the observer said, 'Do you like him enough to invite him to join your club? And if so, can he afford to pay the dues?'''

            I think it's ridiculous that we're even having this discussion. But Khan's application certainly will be a matter of keen interest for those who want to see if the NFL is truly inclusive at the highest level.

            I believe NFL Commissioner Roger Goodell is a man of integrity. I would be absolutely shocked if Khan is treated less than fairly by the NFL or the owners. And if Khan's finances check out, he should be fine. (More on that later.) I would think the NFL would be proud to open the doors to its inner sanctum to Khan — an ambitious, self-made man who represents the American dream.

            After all, Goodell spoke out against popular radio talk-show host Rush Limbaugh when Limbaugh briefly partnered with Dave Checketts in a bid to buy the Rams.

            Indianapolis Colts owner Jim Irsay also denounced Limbaugh; Irsay happens to be a member of the NFL Finance Committee, which will review Khan.

            After taking Limbaugh to task for making "divisive" comments, Goodell was challenged by a member of Congress during an appearance on Capitol Hill.

            Goodell responded, in part, with this: "The NFL is about bringing people together, it's about unity and that we do not — we do not move toward divisive actions. And, in fact, our teams, I think, have demonstrated that both on and off the field. Nothing brings a team and a community together better than the NFL."

            The NFL received a "B" — its best grade ever — in the 2009 Race and Gender Report Card issued by the Institute for Diversity and Ethics in Sport (TIDES). The NFL had five minority general managers and six minority head coaches in 2009. But in its report, TIDES also pointed out that "no person of color has ever held majority ownership of an NFL team." And according to TIDES, no minority...
            -02-14-2010, 01:18 PM