Dea Spanos vs. Dean Spanos

[Bolt4Knob]

Eh. In terms of meddling, I think they’re pretty middle of the pack if not on the lower tier. There are far worse owners like Snyder, Jones, McNair, Haslem etc. I didn’t even knew Dean existed until the Marty and AJ incident.

I can only go by the record - and for 30+ years - its not very good. Maybe his sons should not be involved with football decisions. Marketing, ticket taker, whatever. But not deciding what player is picked for the roster.

[Xenos]

I can only go by the record - and for 30+ years - its not very good. Maybe his sons should not be involved with football decisions. Marketing, ticket taker, whatever. But not deciding what player is picked for the roster.

Then you have a problem with basically every NFL team and owners that have kids.

[RTPbolt]

I dont have a huge issue with the Spanos family owners in general. We as fans have no clue whats really gone on from the inside...too much conjecture and assumptions. The SD situation was complicated and the city fucked up in my opinion for not stepping up for over a decade to actively look for solutions....cant lay that egg all on the owners...will never know the details. If I was Dean id have been ready for plan B too based on the lack of movement with San Diego....and I gre up in San Digo too.

AJ i think fucked up the Schotty situation...im assuming it was his ego that caused the ripping Schotty out of there,,,yes Dean had to approve but he trusted in AJ....I put that one as a mixed ownership of the GM needing to recognize the value Schotty brought and finding compromise. You might even say Dean let the GM do his job and stayed out of it....its all perspective....and we will never know all sides of any of these stories.

This is a business at the core. To say you would not look at the options to maximize the profits of the business would be ignoring the typical premises of businesses....to grow and make money. The NFL is a complicated situation with big $s involved and taking loans is normal. Running a billion dollar company is not easy and too often i think people generalize decisions that arent really taking into account the real facts....that we will never know. I actually like the approach of this franchise being more than just making money....family is important to me....as is winning. I think we are setting up pretty nicely right now. Dont see an ownership change really being a benefit and could even make things worse.

[Xenos]

Here's Popper's deep dive look at the situation. Bolded is my emphasis:

https://theathletic.com/2493803/2021/04/02/no-the-spanos-family-wont-be-forced-to-sell-the-chargers-to-jeff-bezos/?redirected=1

Dea Spanos Berberian, the sister of Los Angeles Chargers owner Dean Spanos, filed a petition in L.A. Superior Court on Thursday in a bid to force a sale of the team.

This, naturally, produced a flood of questions and hot-take reactions. But what exactly is going on here? Does Berberian have the leverage to force a sale? Will the petition hold weight in court? Why is Berberian, who herself effectively owns a quarter of the Chargers, trying to pressure a sale when the league just signed new television contracts worth over $100 billion, of which the Chargers will directly consume 1/32? Did Dean Spanos actually admit to wanting to sell the team in three years? Are the Chargers really swimming in mountains of debt?

We answer and explain.

The petition
The petition, first reported by the L.A. Times, specifically targets a 36 percent stake of the Chargers that is owned by a trust. Dean Spanos and Berberian are the sole co-trustees. Alex and Faye Spanos, the siblings’ parents, who died three years ago, created the trust in 1998. That was four years after Alex ceded control of the team over to Dean, who, through an operating agreement, is the “manager” of the team.

That 36 percent stake, which was previously owned by Alex and Faye, is effectively divided equally among the four children: Dean, Berberian, their brother Michael Spanos and their sister Alexis Spanos Ruhl: 9 percent each. Each also owns an additional 15 percent of the team individually, meaning each sibling’s stake effectively totals 24 percent. The Spanos family owns 96 percent of the Chargers. While the petition is brought on behalf of the trust, it seeks to compel a full sale of the team.

The filing alleges the trust is facing an estimated $353 million in debt — or “total liabilities” — and is taking on $11 million in additional debt annually. The estimated total figure includes more than $75 million in projected estate tax that is not finalized, as the IRS has not yet completed an audit of Alex and Faye Spanos’ estate following their deaths. The petition also alleges $22.5 million in outstanding pledges to charities that are included in the liabilities.

What is unclear from the petition is whether the $11 million loss represents a historic pattern. The petition says only that amount was lost in 2020, a pandemic year when NFL teams on average were short $125 million and paying players full salaries. The petition does not mention losses from previous years and predicts future losses that are predicated on the same amount of income as 2020.

This debt is the primary basis of the petition’s argument. “Rather than seeking to monetize illiquid assets in order to pay debts and liabilities, and make distributions to beneficiaries, the Co-Trustees have principally been borrowing, including borrowing money from one bank to pay another,” the petition reads, referencing the 33 beneficiaries of the trust, 28 of whom are grandchildren or great-grandchildren, and one of which is the Spanos Foundation. In other words, Dean, and by association his siblings, have been refinancing their debt. This is a relatively common practice and a typical NFL team would have hundreds of millions of dollars in debt, a conservative amount on such a valuable asset.

The petition argues that selling the 36 percent stake of the Chargers is the “only candidate for solving” the debt issues. It states the Chargers as an asset account for 83 percent of the trust. The implication is the lack of diversification in the trust leaves no other options for producing enough liquidity — or cash — to pay off the debt.

Dean, Michael and Alexis rejected this argument in a statement.

“Our parents, Alex and Faye, wanted the Chargers to be part of the Spanos Family for generations to come,” the statement read. “For the three of us the Chargers is one of our family’s most important legacies, just as it was for our parents. Unfortunately, our sister Dea seems to have a different and misguided personal agenda.”

The petition lists the liabilities the trust faces, but it does not discuss the assets the trust owns.

According to Forbes’ most recent valuation, the Chargers are worth $2.6 billion. They could be worth more than that on the open market, and one reason behind the lawsuit may be to attract buyers.


So what happens now?
A lengthy and arduous court battle between family members … unless the NFL steps in.

The important part of this legal fight comes down to the right of first refusal, which the petition addresses and explains. According to agreements, if one of the four siblings wants to sell any part of their share of the team, “any of the Spanos owners … have a right to match the proposed offer.” The absolute best-case scenario for Berberian is that the court rules in her favor and forces the other siblings to sell the 36 percent stake. At that point, though, the siblings will have a legal right to match any offer and regain control of the 36 percent. Berberian would get her liquidity. The Spanoses would maintain their 96 percent stake in the Chargers by effectively buying out her 9 percent stake in the trust.

According to a source close to the family, the Spanoses view this as a highly unlikely outcome and one that would not materialize for years. But even if it gets to that point, there is not an apparent scenario where Dean, Michael and Alexis would cede control of the team unless they want to. And, of course, Dea is not just asking the court to compel the sale of the 36 percent interest, but of the whole team.

“If Dea no longer wishes to be part of this family legacy, the three of us stand ready to purchase her share of the franchise, as our agreements give us the right to do,” the three siblings said in their statement. “In the meanwhile, the operations of the Chargers will be entirely unaffected by this matter, which relates only to the 36 percent share of the team that was owned by our parents. The three of us are entitled to three-fourths of that 36 percent share in any event, and under no circumstances will this situation impact control of the franchise. The three of us will remain firmly united as we seek to fulfill our parents’ wishes to make every decision in the best interests of the Los Angeles Chargers.”

One possibility is the NFL steps in and forces the dispute into arbitration. All owners agree as terms of their membership in the NFL to take their disputes to arbitration. The NFL forced the disagreement between Washington Football Team partners out of court using this argument, though in a trust case it can be tougher. Nonetheless, the NFL is surely displeased to see this squabble hit the courts and thus the media.


And what about the letter?
According to the aforementioned 1998 operating agreement that designated Dean as “manager” of the Chargers, which the petition cites, “no non-manager member can sell its interest without the Manager’s (i.e. Dean’s) written consent to transfer and to admit a substituted member.”

To circumvent this stipulation, the petition includes a 2019 letter sent from Dean to his three siblings, two years after the team’s move from San Diego to Los Angeles. In that letter, Dean writes:

“Although there can be no assurance that a sale will actually be consummated, no later than thirty (30) days following the conclusion of our fifth (5th) season in the new SoFi stadium, I agree, in my capacity as Manager and on behalf of the Company, to retain an investment banking firm reasonably acceptable to Dea, Michael and Alexis to market the sale of the Company, and I will cooperate in such marketing effort in order to maximize value for the benefit of all Members. I shall commence the process to interview and identify qualified investment banking firms to present to Dea, Michael and Alexis reasonably in advance of the retention and arrange for meetings among the parties as part of the engagement process. In the event that any Member wishes to sell his or her interest in the Company as a result of the above referenced process or at any other time, I hereby provide my advance consent to such transaction subject to the rules of the NFL regarding such sales and the first refusal rights referred to … above.”

This section of the letter will surely be heavily debated in court. The petition argues that this paragraph from Dean qualifies as “written consent to transfer” after the 2024 season, which would be the Chargers’ fifth in SoFi Stadium. Dean, Michael, Alexis and their lawyers will argue that this paragraph dictates no such thing. From their perspective, Dean was merely creating a pathway for Berberian to get out of the family business and gain liquidity for her stake in the team, and that nowhere in the letter did he commit to sell. Hiring an investment banking firm, as Dean writes, would be necessary to acquire a firm valuation of the Chargers. This, in turn, would allow Berberian to sell her 9 percent stake at market value.

The petition, meanwhile, argues that liquifying the 36 percent is a means to get out from under the $353 million in debt.

If the court accepts that this letter is proof of written consent, it could force the sale of the 36 percent. But, again, the three remaining siblings have the right of first refusal and can regain the entirety of the trust’s stake even if they lose the court battle.


The bottom line
In the end, we do not know Berberian’s true intentions. The petition leans into the widely circulated narrative of the cash-strapped Chargers. The facts, on the other hand, paint a picture of someone seeking liquidity at the earliest possible date.

From a legal standpoint, Berberian has an avenue to gain that liquidity. But because of the right of first refusal, the prospect of her forcing her siblings to sell the team to a third-party buyer, like Amazon founder Jeff Bezos, just does not have legs.

The three siblings — primarily Dean — could eventually decide to sell the team. Sports owners many times before have misled in written statements. But if they do sell, it would happen on their own terms.

[Boltjolt]

Then you have a problem with basically every NFL team and owners that have kids.

Jerry Jones Son is actually a voice of reason for Jerry since he is soo shitty as a GM/Owner lol.

I do hope Dean sells by 2024. I just hope if Staley is doing well as the HC they new owners keep him. Tlesco, who knows. If we get a owner like Bezos for example, he has ZERO football chops so maybe he leaves it alone.

[Bolt4Knob]

Then you have a problem with basically every NFL team and owners that have kids.

Well - do you want to win or do you want to pretend you are a bad ass playing NFL General Manager

[Xenos]

Well - do you want to win or do you want to pretend you are a bad ass playing NFL General Manager

I want to win of course. But the Spanos kids being involved in operations doesn’t mean they’re not qualified for the position. Or that it necessarily correlate to the team losing or winning. And ultimately at the end of the day, there’s still an actual FO with an actual GM who makes these decisions.

[Boltgang74]

[QUOTE=Xenos;n1196607]

I want to win of course. But the Spanos kids being involved in operations doesnt mean they;re not qualified for the position.

Their lack of winning seasons and zero trophys does.

[jamrock]

I want to win of course. But the Spanos kids being involved in operations doesn’t mean they’re not qualified for the position. Or that it necessarily correlate to the team losing or winning. And ultimately at the end of the day, there’s still an actual FO with an actual GM who makes these decisions.

Do you think any other franchise would hire them in their current positions?

[wu-dai clan]

lolololol TPB.

Pull your heads out...

[Bolt4Knob]

Do you think any other franchise would hire them in their current positions?

Good question.

And I can only go by record but since John Boy has been in the office, Staley is the third coach and I think at most two playoffs but maybe McCoy went his first year so he pre-dated John Boy. If that is true - one playoff under John Boy.
Whether having family in major roles works for another team or doesn;'t work doesn't matter - if the Spanii are in the building

Hell I will still root for them. I rooted for the Padres with the Werner and Moores crap - I will root for the Chargers. Haven't found another team. But just my assertion if the Spanii just let Tom Telesco and Brandon Staley do their jobs and just pat them on the back and say "atta boy" and truly were not involved - I thnk the team would be in better shape.

[Xenos]

Do you think any other franchise would hire them in their current positions?

Do you think any other franchise would hire the other owners’ kids?