Family Legacy Planning: It’s All About Football

Happy Thanksgiving to all! If your home is like mine, part of the day’s traditions will include a football game, with some of us glued to the TV to cheer on the Dallas Cowboys (while others just tolerate it as background noise). Preserving holiday traditions helps keep families connected. Whether yours are more about football or desserts, I applaud the importance of keeping those traditions alive. As Tevye sang in “Fiddler on the Roof,” “without our traditions, our lives would be as shaky as a fiddler on the roof!”

While I’m in a football state of mind, I’ll repeat a favorite metaphor from Jim Grubman. Picture a football field. At one end is a highly skilled quarterback who hurls a perfect pass to the other end of the field. Standing around at the other end are a bunch of clueless receivers. They’ve never been to a practice. They don’t know the rules of the game. They’ve had no experience learning to work together as a team. What are the odds they’ll catch the pass and score a touchdown? Statistics say the odds are only 10%. The quarterback is the family patriarch/matriarch. The football is an inheritance. The receivers are kids and grandkids who have never been prepared for the inheritance coming their way. This football analogy helps us understand the importance of preparing heirs before the inheritance comes their way. That’s what Legacy Planning is all about: improving the odds that your heirs won’t fumble the inheritance football when it comes to them. As Matt Wesley urges, it’s time for the patriarch to move from being the quarterback to being the coach.

In recent weeks, my Family Legacy Planning series has been devoted to the topic of Business Succession Planning. Nowhere is business transition planning more complicated than in the National Football League. Media coverage is replete with family strife over control of an NFL franchise. It’s a hot topic, as the dollars are astronomical, and the transfer of team ownership is imminent. As Ben Fischer reveals in “NFL, Next Person Up,” (Sports Business Journal, Sept. 5, 2022), the average age of the 32 controlling NFL owners is 72. Only eight are below 65. Two of the league’s most powerful are Patriots’ Robert Kraft at 81 and Cowboys’ Jerry Jones at 80. Ready or not, change is coming.

NFL Commissioner Roger Goodell (himself 63 and purportedly contemplating retirement) is committed to developing the next generation of owners. The NFL provides apprenticeships in a junior rotational program, promoting the most talented to serve on committees. Every year, each team must report to the NFL who will take over in case of a sudden vacancy. Per Fischer, the ideal scenario is to create “legacy families,” keeping the business in families where the NFL is their top priority. The goal is to pave the way for a smooth transition when guys like Kraft and Jones are gone. The NFL is trying. “But a litany of factors, among them complicated estate planning and unpredictable family, legal and tax dynamics, figure to make orderly successions within a single family the exception rather than the rule.”

The NFL is waking up to the importance of estate planning. It now allows ownership to be transferred to trusts. It’s also lowered the minimum equity ownership of the family’s head to as little as 1%, recognizing the need for families to do planning to minimize estate tax and avoid a forced sale soon after the owner dies. Even with all the NFL’s efforts, challenges persist. Consider these examples:

  • The requirement that teams file an annual succession plan began after Tennessee Titans owner Bud Adams died in October 2013. Adams divided the ownership equally among three branches of his family, leading to a war over which would have power and control over the team. By requiring the annual designation of a successor, the NFL hopes to avoid a repeat of that strife when an owner dies.
  • Alzheimer’s disease forced Denver Broncos owner Pat Bowlen to turn over control to President Joe Ellis in 2014, followed by litigation among his kids over who would succeed him. The result? The team was put up for sale in February 2022 and sold four months later to a group led by former Walmart chairman Rob Walton for $4.65 billion, the highest price ever paid for a US professional sports team.
  • Houston Texans owner Bob McNair died in 2018, leaving the team to wife Janice with son Cal running the show. In the next three seasons, the team fired a general manager, two coaches, and a president. To add insult to injury, the Texans won just four games in two seasons and fell to 17th in attendance.
  • Washington Commanders’ owner Dan Snyder is reportedly considering a sale of the franchise, a team he bought in 1999 for $750 million that now has an estimated value of $5.6 billion. The prospective sale comes after repeated scandals, including accusations of a toxic work environment. There’s a lot of speculation of who a new buyer might be, but any transaction would have to be approved by 75% of NFL team owners. The situation is messy, to say the least, and not the kind of ideal transition the NFL desires.
  • One of the most painful stories involves Joe Robbie, owner of the Miami Dolphins. At his death in 1990, Robbie left behind a wife Elizabeth and nine children. His Pourover Will sent his assets to a Living Trust, and unknown to Elizabeth and most of the kids, he named three of the children as co-trustees. The co-trustees sold part of the franchise to Wayne Huizenga (former owner of Blockbuster Video), infuriating Elizabeth and the six other children. A family feud erupted that tore the family apart. When Elizabeth died almost two years after Joe, she left nothing to two of the kids and only $200,000 each to two other kids. The family had to sell 85% of the Dolphins franchise and 50% of Joe Robbie Stadium to pay a $45 million estate tax bill and to satisfy a claim Elizabeth filed against Joe’s estate.
  • Tom Benson, owner of the New Orleans Saints (as well as NBA Pelicans basketball franchise) changed his Will at age 87, only a month after a court found him mentally competent. The legal battle, filed by daughter Renee and grandchildren Rita and Ryan, cited powerful evidence of incapacity and alleged Benson was being manipulated by his third wife of 10 years, Gayle, then age 68. The new Will gave sole power over the franchises to Gayle, stating: “I specifically provide that Renee Benson, Rita LeBlanc, Ryan LeBlanc, and all of their descendants shall have no interest whatsoever, and no legacy or other inheritance or benefit of any kind shall be paid to any of them under this will or otherwise.” Benson had previously designated granddaughter Rita to control the teams, but everything changed after an argument erupted between Gayle and Rita at a 2014 Saints game. Needless to say, Gayle (who once ran a home jewelry business and was twice previously divorced) won that fight.

The lessons from these NFL horror stories abound. Suffice to say that the solution lies in tackling the problem long before the team owner dies. As my Family Legacy Series continually reiterates, we should learn from the best practices of the 10% who win the Super Bowl of Family Legacy Planning. Don’t fumble the ball like those 90% who fall victim to “shirtsleeves to shirtsleeves in three generations.” Your estate planning advisors can help you embark on regular family meetings, create a family governance structure, engage in thoughtful business succession planning, and preserve your family values and heritage—starting right now with some special Thanksgiving traditions!

I wish you all a joyful and meaningful Thanksgiving, filled with gratitude for our abundant blessings.

Marvin E. Blum

Marvin Blum is in an NFL state of mind at AT&T Stadium, wishing all a Happy Thanksgiving (and a Dallas Cowboys win!).