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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
          • 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
          • 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
          • r8rh8rmike
            Bernie: More On Rams Sale & Shahid Kahn
            by r8rh8rmike
            02.11.2010 11:01 am
            More on Rams Sale & Shahid Khan
            By Bernie Miklasz

            Good morning …

            In no particular order:

            * What are Stan Kroenke’s options? The Rams’ 40 percent owner has three choices. (1) keep his 40 percent and work with Shahid Khan if Khan is approved as the 60 percent owner. (2) sell his 40 percent to Khan. (3) exercise his right of first refusal, try to buy all 100 percent and then take on the NFL to persuade the league to change its rules covering cross ownership. Unless the NFL changes the rules, Kroenke can’t be the 100 percent owner.

            * Perhaps Kroenke will have a fourth option; there are rumors of the NFL Denver Broncos being for sale.

            * Why did Khan gain the advantage over Dave Checketts in the competition for the Rams? Two reasons: (1) The Checketts’ group was financially prepared to buy 60 percent of the team — the piece owned by Chip Rosenbloom and his sister Lucia Rodriguez. If Kroenke wants to opt out of his 40 percent, the Checketts’ group wasn’t in position to buy Kroenke’s 40-share as well. Khan, on the other hand, has the resources to buy all 100 percent if need be. (2) Khan’s bid is a stand-alone deal; he is, for now, by himself on this. (It’s always possible to add partners later). But the NFL likes clean deals. The NFL prefers a one-owner structure. Checketts had cobbled together a network of investors; the ownership pie was being divided among many people.

            * What’s next for Khan? A purchase agreement has been signed. It will take several weeks, perhaps 6 to 8 weeks, for the Rams’ owners and Khan to formally close on the deal, which is a normal procedure. During this waiting time, Khan will likely be vetted by the NFL Finance Committee. Every aspect of his finances and personal background will be inspected by the league, which, again, is standard procedure. If Khan gains clearance from the committee, then the NFL owners will vote on the sale. Khan will need 75 percent of the 32 owners to support him.

            * What about Khan’s dispute with the Internal Revenue Service? Will that be an issue? Obviously, this will draw scrutiny from the NFL’s finance committee. And here is a link to the latest news story on the Kahn/IRS dispute. A couple of things on this: a dispute with the IRS is hardly unusual. This isn’t a criminal complaint; it’s a disagreement on the validity of tax shelters and Khan and his wife paid the IRS the requested amount, $68 million. And now the Khans are challenging the IRS to get the money back. Also, Goldman-Sachs, which handled the sale for Rosenbloom-Rodriguez, thoroughly vetted Khan on this and other financial issues. Goldman-Sachs wouldn’t have forwarded Khan’s bid to the Rams unless the broker had reasonable confidence in Khan’s status and Khan’s prospects for being approved by the NFL. But obviously, questions will be asked.

            * What about Chip Rosenbloom and...
            -02-11-2010, 08:35 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