VOL. 41 | NO. 36 | Friday, September 08, 2017
More than NFL team on line in Titans sale
Anybody got an extra billion dollars lying around? If so, you can own one-third share of an NFL franchise plus a handful of other assorted business ventures.
That’s the situation involving the Tennessee Titans as they head into what could be a very eventful season. Susie Adams Smith, one of three children of the late franchise founder Bud Adams, is attempting to divest herself of one-third interest in KSA Industries, the business conglomerate built by her father.
Prominent among those holdings is a certain NFL franchise.
It is one of the most under-reported stories of the offseason. Bloomberg broke the story, local and NFL media recycled it and that was about it. There has been no follow-up.
Something tells me it would be a much bigger story with much more aggressive reporting if we were talking about one-third of the Dallas Cowboys being on the market, both in the Dallas area and throughout the NFL.
Amy Adams Strunk, controlling owner of the Titans and Smith’s sister, issued a statement through the team that essentially shrugged off the development. Strunk, in the statement, referred to her sister’s proposed sale of “a fractional indirect interest in the Tennessee Titans” and said the development “will not impact team operations in any way.”
Granted, one-third is a fraction, but it’s a pretty big fraction. Indirect interest? I assume she’s been getting one-third of the profits from the team, so that’s a lot of indirect interest.
Strunk wants us all to think that this will be business as usual even after one-third of the team changes hands.
First, I’m not sure you want to maintain the status quo when your team has not been to the playoffs since 2008 and hasn’t won a postseason game in 14 years.
Second, things tend to change if/when what has always been a family business brings in someone from the outside.
Currently, ownership of the Titans breaks down like this since the death of Bud Adams in October 2013: Amy Adams Strunk owns one-third. Susie Adams Smith owns one-third. The other third is split evenly among Susan Lewis, widow of Adams’ son, and each of her two children, Kenneth Adams IV and Barclay Adams.
I keep going back to the mantra of Steve Underwood, president and CEO of the team, when the subject of selling the Titans has been broached. Time and again since the death of Bud Adams, Underwood has responded to reports of a possible sale by stating: “The team is not for sale. It’s never been for sale.”
Things change. Now, one-third of the team is for sale.
It’s no secret that NFL headquarters has its concerns about the Titans’ ownership situation, and that was before Smith put her share of the team on the block. In 2015, the NFL levied a six-figure fine against the franchise for what was termed “non-compliance” with the league’s policy for ownership structure.
At issue is the fact that no individual owns the single largest share of the team. And that won’t change when Smith’s one-third share is purchased.
The new owner will have an equal share to Strunk.
Ownership of one-third of the Titans is only part of what is for sale here. Smith is attempting to sell one-third of her interest in KSA Industries, a private holding company that includes auto dealerships, petroleum interests, ranches and other business operations, including the Titans.
I have no earthly idea what the asking price is for one-third of KSA Industries. It’s not as simple as selling off one-third of the Titans franchise, which was valued at $2 billion by Forbes last September.
Assuming the $2 billion value is in the ballpark, somebody could write a check for $666,666,667 or so and become part-owner of an NFL team. But you’re talking about a bigger check when you throw in all the car dealerships, ranch land, oil wells and other holdings.
And that certainly complicates things. There are plenty of wealthy people out there who would love to be part of an NFL ownership group. But not many of those people want to get involved in all the other business ventures that are part of KSA Industries.
Unless one of the other family members purchases Smith’s share, the team will fall out of the family’s sole control for the first time since the franchise was founded as the Houston Oilers in 1959 and began play in the erstwhile American Football League in 1960. So far, there is no indication that any of the other owners is inclined to acquire Smith’s interest.
In my previous career as columnist for The Tennessean and in more recent writings, I have opined that it is just a matter of time before the team is no longer owned by the extended Adams family. This is the first step. Others likely will follow.
The heirs of the current owners may not care about being part of the NFL. With franchises carrying such value, some will want to cash in.
It’s just the nature of what was once a family business. Eventually, the kids of the kids lose interest in the business and are blinded by dollar signs.
What does this mean for the Titans? That is unclear. The franchise has 11 years remaining on a 30-year lease to play at what is currently named Nissan Stadium. At some point, the stadium will need major renovations or there must be construction of a new stadium in order to keep the team from exploring the possibility of relocating when the lease expires.
It is essential that the ownership group be on the same page during any negotiations with Metro Nashville concerning funding for the stadium.
It’ll be interesting how this sale goes down. Will Smith simply establish an asking price and then go with the highest bidder? Or will she pay particular attention to the would-be buyers’ attitudes about the NFL?
There has been a bit of unease within the ownership group since Adams’ death. Initially, Susie Adams Smith was appointed controlling owner and her husband, Tommy Smith, was installed as CEO. That didn’t work out. It was Smith who hired Ken Whisenhunt as coach. One of the reasons for the hire: Smith was enamored with the fact that Whisenhunt called his own offensive plays.
Whisenhunt’s record as Titans head coach: 3-20. So much for calling your own plays.
Smith retired from the position after 17 months. When he departed, his wife stepped aside as controlling owner, with her sister stepping into that role.
Right about here, let me say that I have been impressed by the way Amy Adams Strunk has embraced her position. She now is deeply involved. She bought a house in Nashville, oversaw changes at head coach and general manager, made improvements at Saint Thomas Sports Park and even interacted with Titans fans.
Don’t underestimate the value of the latter. As he grew older, Bud Adams fell out of touch with fans. When Tommy Smith was CEO of the team after Bud’s death, he avoided public appearances.
In contrast, it’s nice to see the controlling owner show up at training camp and pose for pictures with fans.
All in all, it’s an intriguing situation. While the focus on the Titans certainly will be what happens on the field, let’s not forget that another story is playing out behind the scenes. And it should be of more than “fractional indirect interest” for Titans fans and the city of Nashville.
Reach David Climer at firstname.lastname@example.org and on Twitter @DavidClimer.