Biz Exclusive: Tom Benson valued New Orleans Saints at $1.23 billion, handed luxury condo to heirs
NEW ORLEANS — A veil of secrecy cloaks the recent settlement of disputes over the estate of New Orleans Saints and New Orleans Pelicans owner Tom Benson, but public records indicate that the billionaire and his heirs were far apart in how they valued his teams and that pricey assets such as Benson's San Antonio condominium changed hands even before the battle ended.
Debating over the value of the Saints and Pelicans consumed lawyers and valuation experts hired by Benson and his relatives for more than a year after their differences exploded into public view in early 2015.
Benson, 88, fought to completely remove his daughter and two of his grandchildren from his businesses by buying back Saints and Pelicans stock and other business assets he previously placed in their trusts.
Control over the teams was not in immediate question, as Benson had retained 100 percent of the voting, or controlling, shares in the teams for himself. But he badly wanted to retrieve all of the shares from the trusts after his relationship with his family blew up.
Filings in federal court before announcement of the settlement on June 17 provide clues as to how the experts valued various assets.
A filing by Benson shows that in one method his valuation expert, Kevin Kane, used to calculate the Saints' value, Kane applied a multiplier to the team's 2014 revenue of $342 million. Using a multiple of 3.6, Kane pegged the Saints "enterprise value" – a figure that includes debt and represents the amount that a buyer might expect to pay for the team – at $1.23 billion.
Given the aim of his litigation, it was in Benson's interest to keep his asset valuations relatively low, while his heirs' experts had reason to tilt toward the high side.
A comparison provided in Benson's pre-trial filing showed that the defendants' expert Jeffrey Phillips applied a higher multiplier to the Saints' revenue and put the team's enterprise value at $1.65 billion. Both experts chose a multiplier based on sale prices of other NFL teams.
The two estimates bracket a valuation published by Forbes magazine, which regularly lists key financial information of National Football League teams. In 2015 Forbes estimated the Saints' value at $1.52 billion.
The court filings do not show Kane's final estimate of the Pelicans' value, but Phillips put it at $588 million. Benson paid $338 million for the team in 2012, and Forbes pegged its value at $650 million in January.
Other NFL and National Basketball Association team owners were no doubt relieved when Benson settled with his heirs as it staved off public exposure of financial information about a dozen team sales the lawyers were set to discuss, including the $1.4 billion sale of the Buffalo Bills in 2014 and the 2012 sale of the Cleveland Browns.
Among NBA transactions set for courtroom debate were sales of the Milwaukee Bucks and the Sacramento Kings.
Meanwhile, the valuation experts appeared closer together in estimates on the New Orleans television station that Tom Benson bought in 2012. Benson's expert put the current value of WVUE-TV at $51 million while the highest estimate by the defendants was $57 million. Benson paid $41 million for the station.
Benson's downtown New Orleans office building and nearby properties also were up for debate. His expert pegged the value of Benson Tower and the Champions Square entertainment plaza – acquired with substantial state assistance for $42 million in 2009 – above $90 million.
CONDO CHANGES HANDS
Benson's lawsuit over the shares in the sports teams was separate from the suit his daughter Renee Benson filed in Texas seeking to replace her father as overseer of a trust containing interests in his car dealerships, his Texas bank and considerable Texas and Louisiana property. But it appears that some assets not contained in Renee's trust traded hands last spring as the parties sought to resolve both suits.
In a transfer concluded in March, Tom Benson, turned over to his daughter and grandchildren the luxury condominium he owned in the tony Alamo Heights neighborhood of San Antonio.
Benson bought the 7,000-square-foot double unit, currently valued at $2.9 million, in October 2006, not long after the Saints' returned home from a four-month stay in San Antonio where Benson had taken the team after Hurricane Katrina struck New Orleans.
He and his wife Gayle regularly used the penthouse condo during visits to San Antonio, where Tom Benson in the 1960s had launched a sprawling automobile empire and where he continued to operate three dealerships.
Benson initially purchased the condo through Benson Football LLC, the holding company that owns the Saints. But in 2013, perhaps because he wanted his wife to inherit the condo, he transferred the deed into his own name, according to property records of Bexar County, Texas.
More recent records show that on March 1, the deed changed hands again, this time moving from Benson directly into his heirs' trusts, giving them 100 percent control of the condo.
Outsiders may never know exactly what led to the transfer, but the fact that it occurred more than three months before Benson settled the federal lawsuit involving his sports teams suggests that he was trying hard to resolve both matters.
His Texas ranch and auto dealerships may also have come into play. The heirs' trusts held portions of the auto dealerships and a half-interest in most of the 2,300-acre ranch and homestead that Benson has owned for decades near Johnson City, Texas.
About 200 acres on the ranch were in the trust set up for Renee Benson in 1980, and this acreage contains the home where Renee lived most of her adult life and raised her two children.
The current value of the entire ranch is about $17 million, according to Blanco County property records, and the portion of the property owned directly by Tom Benson may have become another bargaining chip in his efforts to take back ownership of his most valuable assets.
On the way to the latest court settlement, Benson survived his heirs' efforts to have a court declare him mentally incompetent. A state court judge denied their efforts in 2015, an appeals court upheld the ruling, and the state Supreme Court in May declined to hear the heirs' appeal of that decision.
Kathy Finn is a New Orleans business journalist and author of the biography, "Tom Benson: A Billionaire's Journey" (Pelican Publishing), due for release in fall 2016.