By Gerry Dulac
Pittsburgh Post-Gazette
http://www.post-gazette.com
Wednesday, July 09, 2008
Doug Jones/Portland Press Herald Stan Druckenmiller
Less than a year after they celebrated the 75th anniversary of one of the greatest family-owned franchises in sports history, the Steelers appear to be on the precipice of a major restructuring in ownership that could result in the franchise being controlled by a billionaire investor whose last name is not Rooney.
Stanley Druckenmiller, who owns Pittsburgh-based Duquesne Capital Management and whose lifelong dream is to own the Steelers, is engaged in negotiations with at least three, and possibly four, of the five Rooney brothers to purchase their shares of the franchise and become majority owner of the team -- a move that has pitted Steelers chairman Dan Rooney in an awkward and perhaps contentious financial battle against the rest of his brothers.
Mr. Druckenmiller, 55, an Oakmont Country Club member who lives in New York and is known as the "Tiger Woods of Wall Street," was approached by a member or representative of the Rooney family several months ago about purchasing the shares of at least three of the brothers, believed to be Tim, Pat and John Rooney.
According to a source who is a friend of Mr. Druckenmiller, he might also be in position to purchase the share owned by Art Rooney Jr., a move that would give Druckenmiller controlling interest of a franchise that has been owned by the Rooney family since the late Art Rooney Sr. purchased the team in 1933. Goldman Sachs & Co., a Wall Street investment bank, is negotiating the financial arrangement.
The five Rooney brothers combine to own 80 percent of the team, with each owning an equal share, or 16 percent. The family of Jack McGinley, who died in October 2006, owns the other 20 percent.
"This is the first time this has been this serious," said McGinley's son, Pittsburgh attorney John McGinley Jr.
Mr. Druckenmiller is the only investor who has been approached by the Rooney family, according to a source familiar with the situation. However, his involvement has forced Dan Rooney, the oldest of the five brothers, and his son, Art II, the team's vice president, to seek additional financing to purchase the brothers' shares and keep controlling interest of the franchise in the family.
Mr. Druckenmiller declined comment yesterday. However, his friend told the Post-Gazette that it has been Mr. Druckenmiller's "lifelong dream" to own the Steelers and that he has no intention of relocating the team or disrupting the management of the franchise. According to the friend, Mr. Druckenmiller said that Dan Rooney can run the team "as long as he wants."
Mr. Druckenmiller is such a die-hard Steelers fan that he flies from New York to every home game and even paints his face black-and-gold, his friend said.
"I don't think there is any doubt that anyone who looked at this operation would want to have Dan and Art involved," Mr. McGinley said. "I hope this works out. We live too close to each other. These guys are like my brothers."
The restructuring of the owners could be completed by next month, according to a person familiar with the situation.
The restructuring of the ownership has been going on quietly for two years, in part because Dan Rooney is trying to comply with National Football League policy that prohibits owners from having a financial investment in racetracks and gambling.
Three of the Rooney brothers who own an equal share of the team -- Tim, John and Pat -- are involved in the operation of Empire City at Yonkers Raceway, a harness racing track in Yonkers, N.Y.; and the Palm Beach Kennel Club in West Palm Beach, Fla. Each of those facilities also includes slots and/or gaming tables.
But that is not the sole reason for the restructuring. According to a family member, the brothers are concerned about their advancing age and want to pass their financial share of the franchise to their children -- an enticing prospect when they learned the franchise was valued between $800 million and $1.2 billion by Goldman Sachs.
Some of the Rooney brothers were upset when Dan Rooney, the oldest son of founder Art Rooney Sr., gave them a buyout proposal that they felt was significantly undervalued, a source said. That's when a member or representative of the family approached Mr. Druckenmiller about purchasing their shares.
More than a decade ago, the late Jack McGinley Sr., who was married to the sister of Art Rooney Sr., received a call from an intermediary who said he knew someone who would buy the McGinley shares if they became available. According to McGinley's son, John, his father responded, "Tell him we're quite happy the way things are."
That person interested in buying the McGinley shares was Mr. Druckenmiller.
It is not known if the McGinley family would still refuse to sell its shares to Mr. Druckenmiller, but he does not need them to gain controlling interest.
If Mr. Druckenmiller purchased the shares of three brothers, he would own 48 percent of the Steelers, more than either Dan Rooney or the McGinley family, but still not enough to have controlling interest. If he purchased the shares of four brothers -- a possibility according to at least two sources -- he would have 64 percent and become the principal owner.
That is what Dan Rooney and Art Rooney II are trying to prevent. They are seeking to buy the brothers' shares to gain controlling interest of the franchise, something they revealed in a statement released Monday afternoon. Former NFL Commissioner Paul Tagliabue, an attorney, is working with the Steelers to remedy the situation.
Greg Aiello, an NFL spokesman, said the league would not comment on the Rooney re-structuring, saying it supported the statement released by the Steelers. Mr. Aiello said the NFL is not pressuring the Rooneys into restructuring.
The NFL requires all new owners to have at least 30 percent controlling interest in the franchise. The Steelers, though, are among a handful of older franchises that do not have to abide by that policy because they were "grandfathered" under the old guidelines.
First published on July 9, 2008 at 12:00 am
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