Clause forbids Bills' sale to anyone intent on relocation

[Dr. Lecter]

The odds of the Buffalo Bills being sold to a Toronto group -- or any group intent on relocating the NFL franchise -- appear remote.

An overlooked clause in the Bills' restrictive non-relocation agreement with Erie County and the state of New York expressly prohibits the sale of the NFL franchise to anyone who intends to relocate the team -- at least before that agreement expires in July 2023.

This proviso might even supersede the one-time out clause in February 2020 that allows the Bills to break their 10-year lease at Ralph Wilson Stadium for a $28.4-million penalty.

The sale clause all along has been in the non-relocation agreement, signed early last year as a sister legal document to the Bills' 10-year lease extension at Ralph Wilson Stadium.

But, much as the last-resort, $400-million punitive-damages penalty in the non-relocation agreement had been grossly misunderstood and misreported until QMI Agency set the record straight last month, so the prohibition of selling the team to a carpet-bagger of sorts has been disregarded until now.


http://www.torontosun.com/2014/04/28/clause-forbids-bills-sale-to-anyone-intent-on-relocation

[stuckincincy]

http://www.torontosun.com/2014/04/28/clause-forbids-bills-sale-to-anyone-intent-on-relocation

Sounds like a recipe for ownership that will pocket every available dollar, never exceed the cap minimum, forget about building a competitive club, dump vets for rookies frequently, never franchise anybody and so on...

[DraftBoy]

I saw this last night on Twitter, Tim Graham was questioning whether a move to Toronto would classify as a relocation.

Not sure whose interpretation is right on this but it certainly eliminates any LA group.

[better days]

I have read this report before, but it is interesting to see it in a Toronto paper.

This should put an end to those on this board that expect the Bills to move, but it probably won't.

[better days]

Sounds like a recipe for ownership that will pocket every available dollar, never exceed the cap minimum, forget about building a competitive club, dump vets for rookies frequently, never franchise anybody and so on...

Even if that is the case, which I doubt, I would rather see that, than the Bills in Toronto or LA.

[Saratoga Slim]

Anyone who thinks Ralph only cared about the money hereby stands corrected. By ensuring the Bills stay in Buffalo, he's probably costing his estate hundreds of millions of dollars.

And, even if he was on the frugal side as an owner, I guess it's what you do in the end that counts.

The lease and this accompanying document were a very generous gift to Buffalo.

Thanks Ralph.

[Pinkerton Security]

Anyone who thinks Ralph only cared about the money hereby stands corrected. By ensuring the Bills stay in Buffalo, he's probably costing his estate hundreds of millions of dollars.

And, even if he was on the frugal side as an owner, I guess it's what you do in the end that counts.

The lease and this accompanying document were a very generous gift to Buffalo.

Thanks Ralph.

WRONG. He's cheap and only cared about the bottom line, haven't you read anything on this board? Gosh.

[Thurmal]

I saw this last night on Twitter, Tim Graham was questioning whether a move to Toronto would classify as a relocation.

Not sure whose interpretation is right on this but it certainly eliminates any LA group.
I'm not a lawyer, but, in my book, if a business moves their headquarters to a completely different country, that would probably be the quintessential definition of a relocation.

[DraftBoy]

I'm not a lawyer, but, in my book, if a business moves their headquarters to a completely different country, that would probably be the quintessential definition of a relocation.

Neither am I, but Graham's point was because Toronto is considered to be within the Buffalo regional footprint it may not be a relocation in terms of what the clause excludes. I'm not saying it does or it doesn't, but it appears like its something that would need to be answered.

[OpIv37]

WRONG. He's cheap and only cared about the bottom line, haven't you read anything on this board? Gosh.
He did only care about the bottom line when he was alive.

Now that he's dead, he did something that may cost his family 100 million or so, yet they'll still get over 800 million. Gee , thanks.

People sure are quick to forget 54 years of utter mediocrity....

[DraftBoy]

He did only care about the bottom line when he was alive.

Now that he's dead, he did something that may cost his family 100 million or so, yet they'll still get over 800 million. Gee , thanks.

People sure are quick to forget 54 years of utter mediocrity....

Not as fast as they forget 2 AFL titles and 4 AFC Championships...

Was the majority of his ownership tenure mediocre? Yes, but let's not over dramatize it.

[better days]

He did only care about the bottom line when he was alive.

Now that he's dead, he did something that may cost his family 100 million or so, yet they'll still get over 800 million. Gee , thanks.

People sure are quick to forget 54 years of utter mediocrity....

​INGRATE

[Night Train]

Sounds like a recipe for ownership that will pocket every available dollar, never exceed the cap minimum, forget about building a competitive club, dump vets for rookies frequently, never franchise anybody and so on...

Let the club be sold and see the new owner before playing self serving taps...

[IlluminatusUIUC]

Neither am I, but Graham's point was because Toronto is considered to be within the Buffalo regional footprint it may not be a relocation in terms of what the clause excludes. I'm not saying it does or it doesn't, but it appears like its something that would need to be answered.

The way the text of the clause reads in the section they printed in the article, it sounds like any relocation whatsoever would be barred without the consent of the county and stadium corp.

[SpikedLemonade]

Even if that is the case, which I doubt, I would rather see that, than the Bills in Toronto or LA.

Talking proud.

[cookie G]

Anyone who thinks Ralph only cared about the money hereby stands corrected. By ensuring the Bills stay in Buffalo, he's probably costing his estate hundreds of millions of dollars.

And, even if he was on the frugal side as an owner, I guess it's what you do in the end that counts.

The lease and this accompanying document were a very generous gift to Buffalo.

Thanks Ralph.

I've been thinking that this is the "home town discount" that Ralph had previously said wasn't allowed.

As I said before, Ralph stated that there would be no "hometown discount" on a sale. That's because the IRS basically doesn't allow it. The IRS will tax the team based on fair market value. That being the case, you just can't sell it for, say, $300 million less, just to keep it in Buffalo.

What they did instead, with the help of the county and NYS, was purposely de-value the franchise. At the very least, they eliminated some much higher offers of ownership group intending to move the franchise to LA or Toronto.

And what that does is not only keep the team in Buffalo, but it mitigates a higher estate tax assessment by the IRS.

Example

Local group is willing to pay $1 billion;
An LA group would be willing to pay $1.3 billion, seeing increased revenue in LA.

Without the restrictions, if the estate chooses to take the $1 billion to keep the team in Buffalo, the IRS could still tax on a valuation of $1.3 billion. That is because there would be an offer on the table from a ready, willing and able buyer. At a 40% tax rate, the tax liability for the extra $300 million ( never received), is $120 million.

But because of the sale restrictions placed by the lease, the LA or Toronto group will no longer bid. This removes the potential argument from the IRS of a higher assessment. And of course, any qualified appraisal of the franchise must take into account the restrictive provisions of the lease.

Though the estate loses a potential higher selling price, this loss is mitigated by an estate tax savings. Basically, for every dollar they lost in a higher sales price, they save 40 cents in estate tax liability.

Not a bad plan.

[The Zone Ranger]

Thanks for explaining that Cookie. I have to admitt I had always thought Ralph was out for himself. This shows he definitely appreciated the support the city of Buffalo gave him.

[justasportsfan]

to us Homers that's good news, to "realists" thats more bad news. They will have to be miserable by choice for a few more years.

[Bill Cody]

This article is very promising but I'll still feel a lot more secure if the new owners are local people. If an out of state group buys the team and attendance does drop because fans are suspicious of their motives that could be a self fulfilling prophesy 6 years down the line- it would be like "we wanted to stay but look at the attendance". Having said that this agreement has to give a carpet bagging buyer pause. It's still not a guarantee the team won't move by any means. 6-9 years is not that long a time. It does mean that anyone thinking about moving would have to keep their plans secret for quite a while which would not be easy, the planning involved in a new stadium is immense. Interesting.

But the point about the league not approving a move is garbage- they really can't/won't stop it. Just ask Oakland, Cleveland and St Louis. And the league has this bizarre hard on for the game going world wide, I suspect a move to Toronto would generate crocodile tears at best from the NFL.

[trapezeus]

i wonder if the NFL had to approve the lease at the time of signing. if they really wanted a team elsewhere, they wouldn't have allowed such a restrictive clause.

i think ralph's warts and goodness are well documented. I think he ran the team solely for profit for the last 10 years after watching how the donahoe thing blew up in his face. and i think he was happy with the revenue for his family during those years. but i also think he was an oldschool guy who believed in a little bit of honor and tradition. and he was able to do all he could to keep the team here.

now, the whole thing is in the hands of investment bankers and lawyers. as a result who know what will happen regardless of the intent of ralph or his carefully worded documents.

[Dr. Lecter]

The NFL did have to approve the lease - although they did not sign it.

(As per the Erie County Executive this AM on WGR)

[better days]

i wonder if the NFL had to approve the lease at the time of signing. if they really wanted a team elsewhere, they wouldn't have allowed such a restrictive clause.

i think ralph's warts and goodness are well documented. I think he ran the team solely for profit for the last 10 years after watching how the donahoe thing blew up in his face. and i think he was happy with the revenue for his family during those years. but i also think he was an oldschool guy who believed in a little bit of honor and tradition. and he was able to do all he could to keep the team here.

now, the whole thing is in the hands of investment bankers and lawyers. as a result who know what will happen regardless of the intent of ralph or his carefully worded documents.

The NFL did indeed have to sign off on the lease.

[BertSquirtgum]

Neither am I, but Graham's point was because Toronto is considered to be within the Buffalo regional footprint it may not be a relocation in terms of what the clause excludes. I'm not saying it does or it doesn't, but it appears like its something that would need to be answered.

No

[WagonCircler]

I think Ralph truly cared about the fans and wanted the team to remain in Buffalo, and he deserves big time credit for the new lease.

Unfortunately, I think he was an incapable owner who was his own worst enemy, letting personal grudges ruin every good run the Bills were on.

He ran off Saban twice, Chuck Knox, Bill Polian and John Butler and replaced them with cronies and hacks like Pat McGroder and Russ Brandon. Ralph preferred losing with people with whom he was personally comfortable, to winning with people who disagreed with him.

He was a nice man who helped out many friends, and my opinion of him has gone way up given the details in the current lease, but he wasn't a winning owner.

Still, I'm thankful for the steps he took to ensure the team stays in Buffalo. He was a man of his word and that's rare these days. He's worthy of respect for that.

[better days]

I think Ralph truly cared about the fans and wanted the team to remain in Buffalo, and he deserves big time credit for the new lease.

Unfortunately, I think he was an incapable owner who was his own worst enemy, letting personal grudges ruin every good run the Bills were on.

He ran off Saban twice, Chuck Knox, Bill Polian and John Butler and replaced them with cronies and hacks like Pat McGroder and Russ Brandon. Ralph preferred losing with people with whom he was personally comfortable, to winning with people who disagreed with him.

He was a nice man who helped out many friends, and my opinion of him has gone way up given the details in the current lease, but he wasn't a winning owner.

Still, I'm thankful for the steps he took to ensure the team stays in Buffalo. He was a man of his word and that's rare these days. He's worthy of respect for that.

Ralph did not drive Saban off, Lou had wanderlust & left of his own accord.

Saban never stayed in any one place too long. But I loved Saban as a HC.

[WagonCircler]

Ralph did not drive Saban off, Lou had wanderlust & left of his own accord..

yes, he did. Over money.

There's a great Felser column about it from about 10 years ago. I'll see if I can dig it up.

[better days]

yes, he did. Over money.

There's a great Felser column about it from about 10 years ago. I'll see if I can dig it up.

I would love to read that. I was still in Buffalo when Lou was HC & loved reading Felser.

I recall no such column.