The Denver Broncos will experience a transition in ownership this offseason, CEO Joe Ellis stated before the 2021 season began. Outgoing powers of the Pat Bowlen trust consist of Ellis, Vice President and General Counsel Rich Slivka, and lawyer Mary Kelly.
The impending transition of the Broncos began when the late Pat Bowlen gave way to a trust designed to identify the next heir. No Bowlen heir has been identified, therefore the trust is tasked with handling a sale of the team.
Ellis will be addressing the ownership situation soon as the team’s immediate domino of the offseason falls in the hire of Nathaniel Hacket as the team’s 18th head coach.
Lost in the coaching search and hoopla about a potential acquisition of Aaron Rodgers is the looming new ownership. The Broncos are primed for sale as several hurdles have been cleared, which follow.
The final lawsuit against Pat Bowlen Trust dismissed
First, the final lawsuit impacting the sale of the Broncos was dismissed according to ABC News. A Denver County judge dismissed a lawsuit from the Edward Kaiser estate surrounding the right of the last refusal. The Kaiser lawsuit against the Pat Bowlen Trust was the final legal hurdle preventing a potential sale.
As the situation currently stands, it is likely the Broncos are sold. Therefore the process of sale will be through auction as the team is controlled by a trust. The auction serves as a way to objectively provide the beneficiaries with the most capital possible.
Mike Klis of 9News in Denver reports members of the trust are responsible to “have a fiduciary responsibility to the trust’s beneficiaries to go with the highest bidder, pending approval from 24 of the NFL’s 32 owners.” Bowlen’s seven children and his brother John are identified as the beneficiaries.
The next Broncos owner will receive a record-breaking tax break
Second, the next Broncos owner can write off approximately $3 billion in taxes for the legendary franchise according to Owen Poindexter of Front Office Sports.
The Broncos have a current valuation of $3.75 billion by Forbes. A potential sale of $4 billion or more would be the richest team sale in U.S. sports history. Thus, the next ownership group could enjoy a near $3 billion tax break over 15 years.
According to Yahoo Sports Kurt Badenhausen, over 90% of sports team properties, including player contracts, media rights, and trademarks, can be considered “intangible assets.” Therefore, those costs are subject to tax write-offs over a 15-year amortization period.
Based on current tax guidelines, the sale provides the prospective ownership group with the largest tax write-off ever for a professional franchise. A significant tax break should entice more potential buyers. Look for more groups to put their name into the hat as a sale becomes imminent.
With the impending revenue and benefit of significant tax write-offs, a potential ownership pool should be plentiful, leading to Bowlen’s beneficiaries to cash in as the team moves on.
Outside entity tabbed to handle Broncos sale going to market
Finally, the Broncos have retained Allen & Co. to manage the sale if and when the team his the open market per Scott Soshnick and Eben Novy-Williams of Sportico.com.
Allen and Co. handled the last NFL team to change control. The company helped then-owner Jerry Richardson in the sale of the Carolina Panthers for an eye-popping $2.2 billion.
UPDATE: The @Broncos have also hired Proskauer to advise on potential sale. This Proskauer/Allen & Co. duo is the same duo that sold the @Panthers, the last NFL team to trade. https://t.co/aquVvyYHo1
— Eben Novy-Williams (@novy_williams) January 28, 2022
Of the current names, current president of operations and NFL Hall of Famer John Elway has expressed interest in joining the new ownership group.
Denver Gazette’s Woody Paige reported there are now six groups are expected to engage in bidding for the franchise.
With Bowlen-Kaiser lawsuit over, Broncos Joe Ellis will announce plan for new ownership quickly. According to my sources, six candidates to bid. Peyton Manning and John Elway will be in two different groups. Another Colorado-based group is doing the research for bid.
— Woody Paige (@woodypaige) January 11, 2022
Joining Elway in the fray is fellow Hall of Famer and Denver quarterback Peyton Manning, in another group. Finally, Paige made note of a current Broncos Vice President of Strategic Initiatives, one of Bowlen’s daughters, Brittany, is preparing to bid for the team.
Another potential buyer has emerged with Denver native, billionaire investor Robert F. Smith could be in the mix as the Broncos’ next owner according to Michael McCarthy and A.J. Perez of Front Office Sports.
NEWS: Billionaire Robert F. Smith emerges as a potential bidder for the Denver Broncos, sources tell @MMcCarthyREV and I. Here's our @FOS scoop on the Denver native's interest in the team and how Smith could become the NFL's first Black majority owner. https://t.co/EjxrMUV815
— A.J. Perez (@byajperez) January 21, 2022
In the end, with these three hurdles cleared, the cloud over the Broncos’ ownership should dissipate soon. Meaning, the Broncos will have a new ownership group before the 2022 season kicks off.