Bruce Love is editor-in-chief (wealth) of Campden Publishing.
American football devotees will no doubt be aware of the present turmoil engulfing the Pittsburgh Steelers ownership. And family business owners may well get a feeling of déjà vu.
The reasons why patriarch and chairman Dan Rooney doesn't want to sell the family's NFL team, and the reasons why it is almost inevitable that he will, are much the same as many successful second- or third-generation businesses.
Dan and his son Art Rooney II (president) want to keep the 75-year-old franchise in family control while Dan's four brothers want to cash out and follow their own interests. Sound familiar? Like so many other family businesses, from engineering firms in Germany to beer distributors in New Zealand, the problem comes down to nothing more than tax, family differences and a lack of succession planning.
A lot has changed in America since 1988, when the Rooney brothers inherited the team from their father, founding owner Art Rooney, not the least has been the size of estate tax bills, which now are astronomical. When this current generation of Rooneys passes on, it's likely that their estate tax bill will be crippling, which no doubt is at the forefront of Art Jr, Timothy, Patrick and John's concerns.
There is no crime in the Rooneys wanting to keep their death tax bills as low as they can. I applaud it. If the brothers die before selling the team, their children will have to pay around 48% of the shares' value to the federal and Pennsylvania governments. To the next generation of Rooneys, this would be hundreds of millions of dollars in tax. Not exactly an incentive to keep the business in the family.
One way of avoiding such devastating taxes is to pass the estate on to a qualifying charity, created for the family, for the purposes of keeping control of the team. The Rooneys would keep control of the organisation while investing their fortunes elsewhere. This could still be possible for the Rooneys, but it's unlikely, given that Dan's brothers would rather take the profits now.
Dan and his four brothers each have a 16% stake, with the remainder owned by the McGinley family, the Rooney's first cousins. The team has been valued at around $1.2 billion but it's unlikely that Dan will be able to buy out his brothers, meaning any further involvement in the team will most likely be as a minority stakeholder.
Enter Pittsburgh billionaire Stanley Druckenmiller, the chairman of Duquesne Capital Management. He's had his heart set on owning the Steelers for years. As the most serious contender so far, he's promised that if he gets his hands on the team, Dan's position will be safe "for as long as he wants". But Dan isn't getting any younger, and once he bows out there is no assurance that he would be able to cede control to his son if Druckenmiller is the majority stakeholder.
Like many other industries, this is the way NFL franchises are heading: less family owners, more private equity. Only three NFL teams remain that could be truly called family businesses. The McCaskeys own the Chicago Bears, the Mara family owns half of the New York Giants, and the Bidwills have owned the Arizona Cardinals for 76 years.
For Steelers fans like me, it would be a shame to see the team pass out of Rooney hands, but given the team's ownership model and lack of a succession plan, it now seems unavoidable.