What Happens to a Team When Its Franchise Owner Dies?
Right as the 2018-19 NBA season was about to kick off, tragedy struck the Portland Trailblazers as owner Paul Allen succumbed to non-Hodgkin’s lymphoma after a 36-year battle with the disease.
Allen, who also owned the NFL’s Seattle Seahawks, was unmarried and childless, so he left the teams to his sister, Jody Allen. The process of passing on a team after an owner dies, however, is more complicated than simply choosing next of kin.
What happens when a franchise owner dies?
Sports owners are humans just like everyone else, and as such, they should have a plan for what will happen to their teams if tragedy strikes. The NFL requires this foresight, requiring that owners have a succession plan on file with the league. While the NBA does not have the same terms, they assume that such a plan is in place with its billionaire owners.
In the case of Paul’s death, his estate covered the cost of owning the Portland Trail Blazers and Seattle Seahawks for the immediate future, but it was up to his sister to decide whether to keep the teams.
As far as anyone can tell, it appears that Jody plans to keep both teams despite early rumors that she’d sell. With all of this in place, it was up to Paul to ensure that in the event of his death, everything in the organization could run smoothly without him.
Keeping the team running
At the end of the day, sports teams are businesses. Unless the funds and operations dry up with the owner’s death, safeguards should be in place to keep everything running smoothly. The Seahawks and Trail Blazers both had CEOs who oversaw operations as the teams waited for word on what would happen next.
Some owners, like Jerry Jones and Mark Cuban, are well-known for their hands-on approach with nearly every move their franchises make. Most owners, however, are simply there to pay for the operation and let their employees do their jobs.
Some owners, although they retain the title in spirit, aren’t even definitive owners. Paul was always labeled as the Trail Blazers’ owner but his company, Vulcan, Inc., ran the team. They had a board of governors and management who oversaw many of his businesses as one entity. With Paul gone, the company could operate the Blazers because its structure allowed it; there were just more voices in the room.
What if the recipient doesn’t want the sports team?
If Jody decided she did not want Trail Blazers, which she could still do if she wanted to, then the mechanisms that keep the team running would oversee the sale of the team. As Clippers owner Steve Ballmer learned in his attempt to buy the Sacramento Kings, acquiring a team is not as easy as having the money. The league still has the final say on whether a sale is approved.
This means that if an owner buys with the intention of moving, as Ballmer intended with the Kings, they can stop the sale if it is in bad faith for the current market. The mechanisms that occur upon an owner’s death can similarly operate in a way that can keep the team in its current form.
However, with franchises inflating in value and teams often being part of a greater business empire, it makes sense that an heir like Jody would want to keep the teams and let the employees run them.