David Tepper, a Florida hedge fund manager and minority owner of the Pittsburgh Steelers, is in the process of finalizing his purchase of the Carolina Panthers.
Tepper is worth an estimated $11 billion, and his bid is believed to be on a $2.2 billion valuation, according to multiple reports. Tepper will take over the 48 percent of the team previously held by Jerry Richardson, who put his stake in the team up for sale following the season in the wake of an investigation into his alleged sexual harassment and racial misconduct.
The 60-year-old Tepper was born in Pittsburgh and attended Pitt and Carnegie Mellon, where the business school is now named after him. He left a job at Goldman Sachs in 1992 to found Appaloosa Management. In recent years, Appaloosa has been named Institutional Hedge Fund Firm of the Year, and Tepper was honored as the top-earning hedge fund manager by the The New York Times and Forbes Magazine.
Tepper’s bid was not the highest. That honor went to local businessman Ben Navarro, whose group was rumored to have offered $2.6 billion. Navarro founded Charleston, South Carolina-based Sherman Financial Group, the nation’s largest privately held finance company. Last week, Navarro was rumored to have reached out to former NFL quarterback Peyton Manning to join his ownership group.
With the league hoping to wrap up the sale of the team quickly, Richardson and the team were willing to give up some money to have the known commodity in Tepper. Since he already owns 5 percent of the Steelers, he’s been vetted by the league and is familiar to Richardson and the other owners, making approval of his bid a likelihood.
Tepper bought his share of the Steelers in 2009. He’ll need to sell his share before he can purchase the Panthers.
Owners will vote, with a three-fourths majority needed to approve it, at the league’s spring meetings on May 21-23. Prior to that, the finance committee must approve his bid.
Other bidders involved in the process included Alan Kestenbaum, the chief executive of Bedrock Industries, and Fanatics owner Michael Rubin, whose group included Sean “Diddy” Combs and Stephen Curry as potential minority owners. Like Navarro, Kestenbaum was believed to be willing to meet the team’s $2.5 billion price tag, while Tepper and Rubin were not, according to an April report from The New York Times which said that Tepper had dropped out of the bidding process. However, NFL.com reported that there were “significant questions” facing Navarro and Kestenbaum, which opened the door for Tepper’s lower bid.
One issue that could have impacted the larger bids was the NFL’s strict limits on financing for new majority owners. The new majority owner must own at least 30 percent of the team, and the NFL has a debt ceiling for owners of $350 million. That means that Tepper, Navarro or Kestenbaum would need to have at least $300 million in cash to put down at the time of the sale.
Sources close to Tepper told Ian Rapoport of the NFL Network that he wants the team to remain in Charlotte because he “believes in the market.” His desire to leave the team in place was reportedly another reason the league was favorable toward his bid.
Richardson sold the team after a Sports Illustrated article reported on his alleged workplace misconduct, including sexist comments and actions toward female employees and racial epithets directed at African-American employees, including a former scout for the team. Richardson gave up day-to-day operation of the team in December, turning control over to chief operation officer Tina Becker.
Tepper has no allegations of workplace impropriety. A 2009 profile of him by New York Magazine raised some eyebrows, however. The story depicted him as a renegade, compared to straight-laced bankers in the hedge fund industry. Among the details reported in the story were the fact that Tepper displayed a large brass replica of male genitalia in his office as well as silicone breast implants that he kept on his desk and “loved to toss around.”
Those reports don’t seem to have soured the NFL on his bid, however, and approval by the owners is considered a formality according to several reports.
The $2.2 billion bid sets an NFL record for franchise sale price. The Buffalo Bills sold for $1.4 billion in 2014. Carolina, however, sold for less than the team’s valuation — Forbes estimated Carolina’s value at $2.3 billion.