Redskins going back on sale

$800 million buyer withdraws in face of NFL opposition

April 08, 1999|By Vito Stellino | Vito Stellino,SUN STAFF

Howard Milstein, the New York real estate developer who was attempting to buy the Washington Redskins with a debt-laden $800 million bid, withdrew his offer yesterday, paving the way for current owner John Kent Cooke to get a second chance to retain the team.

Facing almost certain rejection at a special National Football League owners' meeting in Atlanta after the league's powerful finance committee split 3-3-1 on his offer, Milstein withdrew his bid and promised not to sue the league.

The $800 million would have been the highest price for an American sports franchise, surpassing the $530 million that Alfred Lerner paid for the NFL's expansion Cleveland Browns.

In return for Milstein's withdrawal, the owners voted 28-2-1 to repay Milstein the nonrefundable $30 million he paid the trustees of the Jack Kent Cooke estate when his bid was accepted on Jan. 11. Only the St. Louis Rams and the Redskins, who were ordered by the trustees to vote to approve the deal, voted no. As he usually does on most matters, Oakland Raiders owner Al Davis abstained.

The owners will attempt to get the trustees to return the deposit, but will repay Milstein, who is also part-owner of the National Hockey League's New York Islanders, if they don't.

"Our commitment is that the $30 million is our problem and not theirs. If there is a forfeiture, we will pay the money," commissioner Paul Tagliabue said.

There was no comment from the trustees. One of them, Mark Pollak, a Baltimore attorney, did not return phone calls to his office.

The trustees now have the option of reopening the bidding process or accepting the losing bid of $680 million made by Cooke, who has been running the team since his father died two years ago.

"I have notified the executors of my father's estate that my offer is still on the table," Cooke said in a statement.

The trustees seem more likely to reopen the process, because they had disputes with Cooke over his running of the team after they accepted Milstein's bid. Tagliabue finally stepped in at the start of the free-agent signing period on Feb. 12 and ruled that Cooke was in charge.

In the confusion, the Redskins lost free-agent quarterback Trent Green to the Rams and then traded three high draft picks to the Minnesota Vikings for quarterback Brad Johnson.

Cooke will continue to run the team until the matter is resolved. He said: "There will be business as usual at Redskin Park," with general manager Charley Casserly and coach Norv Turner continuing in their jobs. Milstein had reportedly planned to fire both.

If there is another round of bidding, Cooke could be outbid again. For reasons he didn't explain, Jack Kent Cooke left only 10 percent of his estate to his son. He stipulated that the club should be sold with the proceeds going to start a foundation.

That triggered the most expensive sports bidding war ever, and Cooke was outbid by Milstein.

What drove the bidding so high was that the Redskins gross about $140 million a year in their new stadium in Landover, which includes 208 luxury boxes and 15,000 club seats -- twice as many premium seats as in most other stadiums.

In a statement, Milstein said he complied with all the league's requirements, but added: "We recognize a protracted, contentious dispute over ownership would cripple the Redskins and harm the community at a time when the team must focus on rebuilding for the future."

Milstein's minority partner, Daniel Snyder, who had pledged $50 million cash as part of his bid, is expected to form another group and bid again.

Another bidder could be Phoenix developer Sam Grossman, who said he ended up at $720 million the first time but apparently missed the bidding deadline.

Orioles owner Peter Angelos dropped out of the bidding because he objected to the blind bidding process. He probably wouldn't enter a second round if the bidding were conducted the same way. Angelos did not return calls to his office.

Snyder, a Bethesda developer, distanced himself from Milstein at the owners' meeting in Phoenix last month when he pledged not to sue and said the league's approval process had been fair.

Milstein asked at that meeting for a delay, and it was granted by the league. But he never came close to getting the required 24 owners to support his bid.

The league created the impression that it was trying to torpedo Milstein's bid and keep Cooke in charge when, a week after the Milstein bid was accepted, a league official publicly supported Cooke.

Joe Browne, the NFL's senior vice president for communications and government affairs, said in January: "The current [Cooke] ownership has a proven track record. The continuity of this ownership would be a plus for the league, if it can be accomplished to the satisfaction of the trustees."

The biggest problem was Milstein's financing, but there were always questions whether the league's real interest was in finding a way to keep Cooke in. Tagliabue denied yesterday that personalities were a factor.

Milstein didn't help his cause when he irritated some owners with aggressive lobbying that included a letter from former Sen. Bob Dole backing his bid.

Milstein also hired an ex-San Francisco 49ers executive, Vinny Cerrato, to prepare to run the front office if he was approved. Cooke then banned Cerrato from the Redskins' offices as the relationship between the two sides became more strained.

Tagliabue said the financing was so complicated that some owners didn't agree on whether Milstein -- who is worth an estimated $500 million, most of it in real estate -- had a viable plan.

Tagliabue said some owners felt that only Snyder had equity in the plan and $750 million was borrowed money. Others disagreed, saying that the $150 million Milstein borrowed from his father should count as cash, but they were in the minority.

"The question of whether it's equity comes down [to] how you treat it and what are the arrangements, and that's where the members disagreed," Tagliabue said.

Pub Date: 4/08/99

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