+1 +1 +1
People are acting like Mark Davis is selling a share of his team out of the generosity of his heart. The more likely explanation is he needs the cash. IIRC you are not allowed to borrow against the value of your franchise (unless the exception is approved by ownership) so while his net worth may be in the billions, it is not unheard for a team to be cash poor.
Brady's deal was originally declined because of the massive evaluation discount that Davis had allowed Brady (originally reported up to 70%). Clearly Davis just wanted Brady and PE partner was about helping facilitate the deal IMO.
While Davis is considered cash poor relative to some other owners, there is no real reporting about him needing the money or that being the motivation for this. Raiders' fans speculate that he wants Brady to eventually take over as owner because he has no heirs which sounds nuts to me (i.e. eventually just gift it all to Brady at a massive discount)
The original report was for a 7% stake and not the 5% he ended up with probably due to the discount decrease. I still think he got some sort of significant discount somewhere because without it, I don't see how Brady can afford to shell out ~$330M even with a loan. I also think his partner helped with the financing (e.g covered a portion of the money for Brady's stake or maybe lent the money interest free or at extremely low interest rate) which is why Brady would include him and he would not be part of it at Brady's terms otherwise.
Without any of that, it would require Brady to pay ~$330M or so for his stake (based on Forbes valuation which tends to always be lower than sale price). Even if only half of that is financed, it would mean Brady had to get $150MM in post tax money. This would involve selling assets in excess of that (e.g ~200MM with capital gains taxes) plus interest in the 6-7% rate (at best IMO given overnight rates) on the financed half ($~150MM) which means yearly interest payments alone of up to $10M (e.g 10 year loan) - a lot of post tax money. None of it is likely IMO.
The NFL mandated that Private Equity purchases must involve a former NFL player (smart PR play) but I assume it's for a tiny fraction because there is no guarantee they could find former interested players with enough money to cover a material portion. I think Brady's stake is considered seperate of that because it is material and that is where Seymour comes in.
All my speculation of course but I can't see how else Brady could afford a 5% stake and why he would involve a PE partner with his terms as the partner does not bring the same intangibles as Brady to the deal (i.e. his brand and his relationship with Davis which was the real reason for the sale).
