The venerable sportsman, once a confidant of commissioners and presidents,struck a tentative agreement Friday to sell 49 percent of the Ravens to AnneArundel County businessman Stephen J. Bisciotti. The $275 million priceincludes an option enabling Bisciotti to buy the rest of the team's shares infour years for an additional $325 million, according to sources familiar withthe deal who spoke on the condition of anonymity.
That gives the team a value of about $600 million.
Bisciotti, who declined to reveal details of the transaction, saidyesterday he intends to invoke his option to become the team's sole owner. Thedeal, which still must pass muster with the National Football League, givesBisciotti the right to purchase the other 51 percent of the team anytimebetween 2004 and 2006, one source said.
If he doesn't exercise the option, he would remain a minority investor andthe Modells would remain in control -- an unlikely outcome given the priceBisciotti has paid.
Modell declined to comment yesterday, but issued a written statementsaying: "My family could not be happier with this turn of events. Steve hasbuilt an incredibly successful business from the ground up. I am impressedwith his acumen and energy, and I believe he can help the Ravens achieve achampionship level both on and off the field."
In an interview yesterday with The Sun, Bisciotti, 39, said he had neverbefore bid on a sports franchise but was moved to act when the Ravens becameavailable. A childhood Colts fan, he came of age in the era of Bert Jones andthe resurgent Colts. Bisciotti said he viewed the purchase as an "averagefinancial deal" but an irresistible opportunity to help his adopted homestate.
He began contacting intermediaries, including former Maryland StadiumAuthority head John Moag, about three weeks ago. He visited the team's OwingsMills complex 10 days ago and met with Modell and his son, team presidentDavid Modell. Bisciotti said he "clicked" from the start with the elderModell, whom he grew up following on the sports pages but had never met.
"When I was a kid, there were two team owners who were held in esteem:Wellington Mara and Art Modell, the old guard," Bisciotti said.
Mara is part-owner of the New York Giants. Modell, part of late NFLcommissioner Pete Rozelle's inner circle, chaired the league's influentialtelevision committee when football became the networks' most valuablecommodity and the sport surpassed baseball as America's most popular.
Although separated by a generation, Bisciotti and Modell share somecharacteristics: Both are self-made multimillionaires from middle-classbackgrounds. And both procured their franchises at young ages. Modell paid$3.93 million for the team, then known as the Cleveland Browns, in 1961, whenhe was 35.
Bisciotti could be as young as 43 when he assumes control, making him thesecond-youngest of the league's current owners. The Washington Redskins'Daniel Snyder is the youngest, at 35.
For the next four years, Bisciotti will have a say over only the biggestfranchise decisions -- leaving day-to-day control in the hands of the Modells.Bisciotti said he would use this time to learn about the sport and team.
One source said a clause in the contract provides for payments to DavidModell if he is discharged within the first two years of Bisciotti's majorityownership.
"Art deserves a championship team, and if this allows him to leave the NFLwith the dignity he deserves for all he has done for the NFL I would lovenothing more than for Art Modell to have a Super Bowl trophy before heretires," Bisciotti said.
A shocking move
It was the desire to win the NFL's championship, as well as to pass theteam on to his two sons, that prompted Modell to agree in 1995 to move theteam to Baltimore. The shocking decision brought a firestorm of protest uponModell, who was burned in effigy in Cleveland and vilified nationwide. Beforethe move, he had been a candidate for the Pro Football Hall of Fame but hasnot been since.
He blamed Cleveland leaders for failing to provide him a stadium on a parwith that the city built for the American League Indians and National Basketball Association Cavaliers. And Modell, 74, said he wanted to follow inthe footsteps of his late friend, Pittsburgh Steelers owner Art Rooney, wholeft his franchise to his son, Dan.
The transaction brings to an end a tumultuous period for the franchise.Modell said he had to move the team to preserve its economic viability, butthe relocation brought on additional costs, and debt, when he had to buy outminority investors and settle lawsuits brought by Ohio officials.
A 1997 restructuring consolidated the team's borrowings under a $185million package of loans, an NFL record at the time that had to be approved bya vote of other owners. To work around the league's borrowing limits, Modellspun off the majority share of the team to his wife, Patricia, but remains itsgeneral partner.
Earlier this year, the team, although paying its loans on time, lapsed intotechnical default when it failed to maintain a ratio of debt to operatingprofit mandated by lenders.
Modell returned to his fellow team owners in July, and they agreed to backa loan to the franchise as it sought a minority investor. Although the loancarried a one-year term, the league asked him to line up the buyer in halfthat time so the NFL would have time to find a buyer for the entire franchiseif need be.
Over the past few weeks, it became obvious that Modell would be unable tomeet his stated objective of raising $150 million through the sale of aminority sale of the franchise and remain in control, sources said.
Bisciotti, represented in part by Moag, who negotiated the team's move toBaltimore and who heads Legg Mason's sports practice, contacted the team andsaid he wanted to strike a deal quickly, eliminating other suitors.
Up for vote
The deal now moves to the NFL, first to the finance committee and then to avote of the full ownership. Three-quarters of the owners of the league'sfranchises must approve the transaction.
Sources familiar with the arrangement predicted relatively smooth sailingfor Bisciotti, who has already passed security clearances for the work he doeson behalf of government clients of his employment services firm and whose networth one source said exceeds $1 billion.
Financing the purchase will be no small matter, and Bisciotti is workingwith Bank of America, formerly NationsBank, a lender active in the NFL. Ifneed be, he will be able to borrow the $275 million first payment for the teambecause minority owners in the NFL face no borrowing limits. When he exercisesthe other option, he comes under a cap that now limits majority owners tousing no more than $100 million of a franchise's value as collateral forloans.
Bisciotti and David Modell said the sale should bring new financialviability to the franchise, freeing it from stiff loan payments, perhaps intime to permit the club to take full advantage of the two first-round draftpicks it will have in April's player draft.
"It would give them the opportunity to get out from the debt andconcentrate on football," Bisciotti said.
David Modell said he doesn't intend for the once-free-spending franchise todiscard the financial discipline it has demonstrated in recent years. "Theorganizational philosophy is not going to change. We still have to be smart,"he said.
"We are extremely thrilled, the entire Modell family. It gives us theopportunity to move forward and get all the extraneous stuff aside and focuson football," he said.
First-year coach Brian Billick sounded enthusiastic about the change. "Whatit does do is give us some latitude. By bringing us to zero debt, it allowsyou to do something prudently, but maybe a little more aggressively in regardsto contracts and being able to keep some people and lure some players."
It could also allow the team to build a new practice complex andconsolidate its offices, now split between Owings Mills and downtown.
"In combination with the fan support and sellouts, the progress on thefield, this financial structure can take us to another level. This is a realpositive day for us," Billick said.
The transaction could prove highly lucrative for Bisciotti as well. NFLfranchises are the most valuable in sports, and their values have beenclimbing rapidly. The Redskins were sold this year for $800 million, a pricethat includes a privately owned stadium in Landover, and the Houston expansionfranchise carried a $700 million fee. It is not hard to imagine the value ofthe Ravens exceeding $600 million in four years.
Stadium authority executive director Bruce Hoffman said no sale of the teamwould affect its legal responsibility to Maryland. A 30-year lease remains ineffect, no matter who owns the team, backed by language that gives the stateextraordinary authority to block a relocation in court.
NFL spokesman Greg Aiello said the league will begin its customarybackground checks as soon as the deal is presented. Typically, the approvalprocess takes six to eight weeks, he said.
"It could be longer or shorter depending on the issues," Aiello said.
Sun staff writers Jay Apperson and Mike Preston contributed to thisarticle.