NFL aims to shield records in trial over Saints ownership
Report: Parties could reach a settlement today
By Kathy Finn, February 3, 2017
NEW ORLEANS — The National Football League has weighed in on billionaire Tom Benson’s legal feud with his heirs over ownership of the New Orleans Saints by asking permission to argue in court for sealing sensitive financial records in a trial slated to begin Monday.
Barring a last-minute settlement among the parties, Benson’s legal team will face off with lawyers who oversee trusts that Benson set up for his daughter and her two children, and which hold interests in the Saints and National Basketball Association team the New Orleans Pelicans, also owned by Benson.
A report by local television station WVUE on Friday indicated that the parties could conclude a settlement before the weekend that would avert Monday’s trial opening.
The dispute involves ownership shares worth hundreds of millions of dollars that Benson, who broke all ties with his heirs more than two years ago, wants to retrieve from the trusts by exchanging them for assets of equal value, including cash and promissory notes.
In a motion filed in federal court in New Orleans on Thursday, the NFL, represented locally by attorney Gladstone Jones, stated that “a limited number” of exhibits expected to be introduced at trial “implicate the commercially sensitive or otherwise confidential information of the” league and its member clubs.
The NBA also has asked permission to argue in support of keeping certain court records out of public view.
Benson sued the trustees in January 2015 after telling his daughter, Renee Benson, and her adult children, Rita and Ryan LeBlanc, that he wanted nothing further to do with them because of their perceived ill treatment of his third wife, Gayle Benson. At around the same time, Tom Benson, now 89, stated that he wants Gayle to own 100 percent of the sports teams after his death.
A trial initially scheduled for June 2016 was delayed after the parties claimed that a settlement was at hand, but when an agreement did not materialize, U.S. District Judge Jane Milazzo set a new court date and ordered the parties to prepare for trial.
Among other issues, the trial, expected to last a week, will focus on establishing a fair value for the ownership shares held by the trusts. The fact that the heirs are “passive” owners complicates the challenge. While their trusts hold about 60 percent of Saints shares and 95 percent of the Pelicans units, their “Class B” stock carries no voting power or control over management or disposition of the teams.
Tom Benson retains all of the “Class A” shares and therefore continues to control both teams.
Also at stake in the case is the Benson heirs’ ownership of the Benson Tower office building andthe Champions Square entertainment plaza next to the Mercedes Benz Superdome in downtown New Orleans, as well as their stake in television station WVUE-TV, which Benson bought in 2008.
Not surprisingly, the gap between the exchange values proposed by Benson and his heirs is wide. Filings in the case show that Benson last summer tried to settle the case by putting up cash and notes valued at close to $500 million.
In a document filed last week, the trustees claimed that Benson’s “proposed transaction is short by between $600 and $700 million.”
Lawyers for both sides of the case have listed Tom Benson as a potential witness at trial.
Part of the process of valuing the sports teams involves examining past sale prices of major league clubs. The 2014 sale of the Buffalo Bills for $1.4 billion is one of the transactions that both sides have used in their discussions.
The documents that the NFL and NBA seek to shield from public view likely involve not only sale prices of various teams, but also revenue and profit information, and perhaps details such as dividends and other benefits that have accrued to club owners.
Forbes magazine, which annually publishes its own value estimates for professional sports teams, most recently pegged the Saints’ market value at $1.75 billion and the Pelicans’ at $650 million.
Tom Benson, who built a successful career as an automobile dealership owner before acquiring the Saints in 1985, amassed a fortune that today likely exceeds $2.7 billion.
Kathy Finn is the author of Tom Benson: A Billionaire’s Journey, published by Pelican Publishing Co. (November 2016).
Kathy Finn • Author, Tom Benson: A Billionaire's Journey • New Orleans •Contact