Jerry Richardson to Sell Carolina Panthers, Diddy Says He Wants to Buy Team
After a story first published by Sports Illustrated broke, implicating Carolina Panthers owner, Jerry Richardson, in a sexual harassment scandal, the 86-year-old owner has announced that he will sell the team after the 2018 season. Shortly after the release of Richardson’s statement, music mogul, and entrepreneur, Sean “Diddy” Combs, announced that he has an interest in buying the team.
Currently, Forbes lists Diddy’s net worth at $820 million dollars, which in its totality is significantly less than what the team is worth ($2.5 billion). While there have been a lot of financial and deal brokering novice weighing in on Diddy’s chances on both sides of the coin, the truth is the quest to buy an NFL team is built more on leverage and business savvy than simple net worth and liquid on-hand cash assets. In addition to meeting the financial demands of buying a $2.5 billion dollar NFL team, there are other challenges that Diddy faces that are more daunting than putting together an investment team.
To be considered the owner of the team, Diddy only has to write a check for 30 percent ownership. The NFL has a rule supports a philosophy that investment groups should not own teams; they prefer to have one person considered the face and leader of a team (with Greenbay be the exception). The Greenbay Packers team was founded by the citizens before the NFL implemented ownership rules, and they are Grandfathered in. They are the only team in the league that does not have a price tag on it. Another challenge that Diddy faces is the list of potential buyers who are in a better position to buy the team — in the area of financial and inside leverage.
Remember, the deal not only has to be approved by the league office, but the owners must also vote on the deal. With the average age of NFL owners being 70 and all of the owners being White (Except 2), that is a tall mountain to climb. While it is not probable that Diddy will be the next owner of the Carolina Panthers, let’s examine the probability of him owning the team. A lot of people who have never even brokered a $500,000 deal, much less a $2.5 billion dollar deal are offering their two cents. Some suggest that because Diddy is only worth $820 million that he lacks the financial weight to buy the team, which means they don’t understand that there multitudinous ways that deals are brokered and leveraged.
The fact that Diddy has been able to amass an $820 million empire speaks to his ability to go after what he wants and get it. So, from a financial perspective, I am sure that he has consulted a number of financial experts who are counseling him on the ways that he can structure a deal to cover the minimum of 30 percent of the asking price he needs in order to be considered the owner. Those who understand business and finance understand that OPM (Other people’s money) is the name of the game.
You don’t have to look far to get an example of how the deal can be structured. When Jerry Richardson brought the Panthers to Charlotte, he wrote a check for less than $200 million and surrendered $60 million in television revenue that he would have received as a part of the owner’s agreement to share television revenue. He also used several unique financial methods to leverage the deal. When Jimmy Haslam bought the Cleveland Browns a few years back, he increased his company’s debt by issuing two large payments to himself totaling $1.7 billion paid out in two payments over two years, which matches the two payments he made to the buy the team.
The question is not whether Diddy will buy the Panthers or not, but what does it mean for the Black collective? If Diddy owning the Panthers simply ends up being another symbolic Black face in a position of perceived power — through which Blacks can live vicariously — then it brings with it nothing of intrinsic value. If Sean Combs were to somehow circumvent all of the obstacles that currently stand in his way, for him to be of benefit to the Black collective he would have to have a short-term and long-term agenda that would outline how he will positively influence the current situation for Black players in the league and to redirect wealth into the Black community.
If this is solely about Sean “Diddy” Combs checking off another item on his bucket list, then we really need to focus our energy and effort on things that actually have intrinsic value for the entire collective instead of becoming so enamored by the success of one. We have lived vicariously through other successful Blacks for long enough. What good is it for Diddy to be living out his dream of owning a professional sports franchise while 80-plus percent of Blacks are living a perpetual nightmare? ~ Rick Wallace, Ph.D., Psy.D.
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