No takers for 31% share of Raiders
Nancy Gay, Chronicle Staff Writer
Saturday, November 25, 2006
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Raiders general partner Al Davis' protracted attempt to sell a minority interest of the team -- which he obtained from the heirs of deceased former limited partner Edward W. McGah -- continues to go nowhere, several sources inside and outside the NFL confirmed Friday.
For months, Davis has been offering for sale the 31 percent stake in the franchise he reportedly purchased as part of a 2005 financial settlement with the heirs of one of the Raiders' co-founders, E.W. McGah, including daughter-in-law Barbara McGah and great grandson Sherratt Reicher, both of whom sued the Raiders' chief in October 2003.
Davis reportedly owns about 67 percent of the team's shares, and the 77-year-old maverick owner -- who is in poor health -- has shown no inclination that he will surrender his controlling power over the franchise.
And the 31 percent former McGah family interest that Davis is peddling has not generated much interest from buyers, sources said, because Davis is not including any form of franchise control in the transaction, either now or upon the event of his death.
The blog site profootballtalk.com reported Friday that Davis has been trying to sell a stake in the Raiders.
"Davis is selling a piece of the team, without any say at all in how it is run. So it's merely a stake in the franchise," said one person who had briefly entertained an acquisition of those rights.
Further muddying any sale is the Raiders' refusal to publicly outline a clear management plan upon Davis' death. A 1999 partnership agreement reportedly makes his wife, Carol, the Raiders' chief executive of the franchise upon his death.
When rumors surfaced in May that former 49ers owner Eddie DeBartolo and team president Carmen Policy were positioning themselves for a takeover of the Raiders because of Davis' declining health, Raiders CEO Amy Trask told The Chronicle that Davis would remain in power.
"Al Davis currently has, and will continue to have, total control of the Raiders," she said, emphasizing the words "total control."
"And that will continue into perpetuity."
Trask would not comment Friday.
The sources agreed to comment only on the condition of anonymity.
Why Davis has been trying to sell a sizable chunk of his Raiders' fortune is unclear.
Forbes magazine this year estimated the Raiders' worth at $736 million, 22 percent below the average NFL franchise value of almost $900 million. According to Forbes, in the nine years that the magazine has calculated team valuations, the Raiders' cumulative operating income (estimated at $116 million) is 42 percent below the NFL average of $200 million.
The Raiders' ownership is said to be split among the heirs of the eight original general partners of the Raiders, with Davis slowly building his majority share from the original 10 percent he purchased for $18,000 in 1966, when he became the team's third general partner, along with E.W. McGah and Wayne Valley.
The original McGah family lawsuit wanted the partnership dissolved or Davis removed from his role as the team's managing general partner, alleging mismanagement, wrongful misappropriation of funds, fraud and breach of contract.
E.W. McGah died in 1983, and his son Edward J. McGah received his father's interest in the Raiders as part of a family trust, becoming a limited partner. He died in 2002.
The Raiders claimed that the McGah heirs became "assignees" upon E.J. McGah's death, giving them no voting rights.
An Alameda County Superior Court judge later ruled that the McGah heirs could not have Davis removed from power as the team's managing general partner unless they had the backing of the remaining ownership interests in the team's partnership. The court also ruled the McGah heirs could have access to the Raiders' closely guarded financial records.
On Oct. 19, 2005, the Raiders and the McGah family reached a settlement, which reportedly included sale of the families' shares to Davis. All parties were bound by a confidentiality agreement.
Reicher stuck by that agreement Friday and would not comment when asked about Davis' sale of his family's former interest in the Raiders.
"I really can't discuss it and I don't want to discuss it," he said very politely, referring further questions to the family's attorneys.
E-mail Nancy Gay at
[email protected].
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