Sports headlines in the US have been lauding family-owned American football team the Pittsburgh Steelers who won their sixth world championship on 1 February, the most championships for any team in the history of the National Football League.
The Rooney clan of Pittsburgh have, for over seventy-five years and three generations, shepherded their team into the hearts of millions of fans around the world. These millions of fans – collectively know as the "Steeler Nation" – celebrated as CEO Dan Rooney accepted the Lombardi Trophy, culminating a year of hard battles fought both on and off the field.
While the Steelers' performance on the field wins sports headlines, it is the off the field story that makes this family business an even bigger winner. It is a story of a family that found a way for a group of owners to cash out at a fair price while allowing other family members to maintain control of the family business. Most importantly, the Rooney family was able to find an acceptable solution for everyone without fracturing the family in the process.
Success for family businesses is often defined as reaching a balance between business achievement and family harmony. For the Rooney family 2009 will be marked by extraordinary success for both.
Over the past year the Rooneys have faced the inevitable challenge of processing how to maintain family control of their successful sports franchise in the face of high estate taxes, restrictive NFL ownership regulations and escalating operating costs – all while keeping the family intact. With 80% of the ownership shared by the five sons of the founder Art Rooney Sr, the family faced hundreds of millions of dollars in estate taxes and the possibility of being forced to sell the business.
Like many successful family businesses in the sibling stage, the Rooney family's quest for the optimal solution to their estate planning challenges offered no easy answers for a family that is comprised of five sons of the founder, all age seventy or older, and their thirty five descendants with a business estimated worth between $800 million and one billion.
The Rooneys examined multiple solutions including a buyer outside the family. It didn't take long for the family to find a motivated buyer in Duquesne Capital Management chairman Andrew Drukenmiller, a former Pittsburgher and life-long Steeler fan, who was willing to buy out four of the Rooney brothers.
Drukenmiller was an attractive buyer for the family because he expressed a willingness to keep both the team in Pittsburgh, and Dan Rooney and his son Art in their current positions of CEO and President. But while this solution would have brought four brothers of the family top dollar for their shares, the remaining brother and his family would have lost control of the business.
In the end, four of the five Rooney brothers agreed to sell all or part of their shares to their brother Dan and his family. By taking a lesser financial offer, they were able to honour their father's wish that the family should not fight over the business and that the franchise should remain in the family.
"My brothers sacrificed themselves doing this," John Rooney said to local newspapers. "They could have gotten more from another offer. My brothers stood up, you know. It's the best way to keep it going [in the Rooney family]."
The real championship won by Rooney family was the survival of the family business and keeping peace in the extended family. This was achieved by each family member working collectively for the best interests of all involved. By putting their desire for family success ahead of individual success and monetary gain, the Rooneys were able to achieve what few family businesses of their size and complexity have accomplished.
The Rooney's, like their football team, were able to achieve a highly challenging outcome only through persistent collective efforts. Many other family businesses, large and small, can learn from the Rooney family's championship season.
Gregory G Greenleaf is a Senior Associate of the Family Business Consulting Group and a season ticket holder at the Pittsburgh Steelers.