Billionaires May Get ‘Highly Unusual’ Shot at Paul Allen's Teams

(Bloomberg) -- Paul Allen’s death may result in two major professional sports franchises being offered for sale at the same time, resulting in a “highly unusual” situation that may draw interest from a bevy of billionaires, according to sports bankers and lawyers.

Allen, who co-founded Microsoft Corp. and amassed a net worth of $26.1 billion, died Monday from complications of non-Hodgkin’s lymphoma, according to a statement from his investment firm Vulcan Inc. His assets include the National Football League’s Seattle Seahawks, which according to Forbes are worth $2.58 billion, and the National Basketball Association’s Portland Trail Blazers, which are worth $1.3 billion. He also owned a piece of Major League Soccer’s Seattle Sounders.

Bankers and lawyers who specialize in sports said they expect the franchises to be sold with the proceeds going to Allen’s philanthropic endeavors. Allen wasn’t married and didn’t have children, and his sister didn’t play an active role with either of the clubs.

“It’s highly unusual for two marquee teams in two of the hottest leagues to come to market at the same time,” said O’Melveny & Myers’ Sports Industry Group Co-Chair Chuck Baker, who represented hedge fund titan David Tepper in his record $2.3 billion purchase of the NFL’s Carolina Panthers. “Given the scarcity value, coupled with labor peace, strong sponsor economics and upward trending television ratings, both the demand and price should be high.”

While Allen’s estate hasn’t said what it intends to do with the teams, bankers and at least one prospective buyer are already speculating. The NFL is the richest and most-watched U.S. sports league, while the NBA is widely considered to be the most global.

Allen, who was 65, was the world’s 27th richest person on the Bloomberg Billionaires Index. Vulcan, formed in 1986 as the chief investment vehicle for his life after Microsoft, became one of the most prominent family offices globally thanks to its high-profile bets on real estate and space. The billionaire, who signed the Giving Pledge in 2010, said he planned to dedicate the majority of his fortune to philanthropic endeavors including wildlife conservation and brain-cancer research.

A rabid sports fan, Allen bought the Trail Blazers in 1988 for about $70 million. He added the Seahawks in 1997 for about $194 million. The value of pro sports franchises has exploded since then, driven up by a seemingly insatiable global appetite for live content.

--With assistance from Tom Metcalf.

To contact the reporter on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net

To contact the editors responsible for this story: Janet Paskin at jpaskin@bloomberg.net, Pierre Paulden, Steven Crabill

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