The estate of Andrew McKenna has hired an investment bank to sell a stake in the Chicago Bears. That stake is roughly 2% of the team, according to three people familiar with the details.
Existing Bears owners will almost certainly acquire the stake up for sale, but the decision on which owner gets the nod will likely land in the lap of commissioner Roger Goodell and new NFL general counsel Ted Ullyot, per multiple sources.
Last week, Bloomberg was the first to report on the McKenna estate stake of unknown size being sold by Galatioto Sports Partners (GSP).
Small pieces of NFL teams are sold regularly for estate planning or to cash in on the soaring valuations of clubs over the past two decades, and they rarely require the league office to intercede in the transaction. But when it comes to resolving disputes, NFL bylaws are clear where jurisdiction lies.
“The Commissioner shall have full, complete and final jurisdiction to arbitrate: (A) Any dispute involving two or more members of the League or two or more holders of an ownership interest in a membership club of League, certified to him by any of the disputants,” per the Constitution and Bylaws of the National Football League.
The stake sale by the McKenna estate is headed that way.
The Bears and the team’s controlling ownership group—the Halas and now McCaskey family—are NFL blue bloods; their roots trace back to the league’s origins, when they paid a $100 franchise fee to start playing in 1920.
In 1990, Pat Ryan Sr. and Andrew McKenna bought roughly 20% of the Bears, with Ryan holding the much larger share. The sale was used to pay down a debt burden from two years earlier when two grandchildren of George Halas sold their shares. The McCaskey family exercised its right of first refusal (ROFR) and matched an offer by two Chicago developers to keep ownership within the family.
Thirty-five years later, the ROFR will likely require NFL intervention. Sources say the McCaskey and Ryan families both have some form of a ROFR, and the NFL needs to decide which one trumps the other.
Pat Ryan Jr. and NFL declined to comment on the McKenna stake. The Bears did not respond to a request for comment.
GSP, which is led by longtime sports banker Sal Galatioto, is tasked with taking the Bears stake to market and see what he can get. The stake does not come with any special rights, such as plane access or tickets. The McCaskeys or Ryan are expected to exercise their right to match the price of any offer depending on which side the NFL rules on the competing ROFRs.
LP stakes in NFL teams have been selling at record valuations since the NFL approved private equity ownership in teams up to 10%. Owners of the Miami Dolphins, Philadelphia Eagles and San Francisco 49ers all sold pieces of their respective clubs at valuations higher than $8 billion.
The Bears’ stake on the market is not related to any succession or liquidity issues with the McCaskeys. Earlier this year, family matriarch Virginia died at 102 years old, and her son George has consolidated power and controls the family shares, similar to how Virginia did.
In August, Sportico valued the Bears at $6.26 billion in its NFL team valuations report, 11th highest in the league.
