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Richardson has zeroed in on favorite to buy Carolina Panthers, NFL.com report says

Jerry Richardson may have a deal to sell the Carolina Panthers before Memorial Day. An NFL.com report says hedge fund billionaire David Tepper has emerged as the favorite to buy the team.

Other bidders still in the process: Charleston, S.C.-based Ben Navarro, who owns consumer lender Sherman Financial, and Canada-based Bedrock Industries CEO Alan Kestenbaum. The league has not formally begun vetting anyone.

Sources told me last month that Tepper is the low bidder so far, in the low $2 billion range. Navarro is believed to be willing to go as high as $2.6 billion, according to a previous report by The New York Times.

According to valuations published in September by Forbes, the Panthers are worth $2.3 billion. Richardson, who founded the expansion team, and his investors paid $200 million for the franchise in 1993.

Tepper, worth an estimated $11 billion, became a minority owner of the Pittsburgh Steelers in 2009. NFL Network’s Ian Rapoport reported Tepper likes the existing support and potential growth for football in Charlotte, according to sources familiar with his thinking, and would keep the team here if successful in his bid.

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David Tepper, founder of Appaloosa Management, speaks during the Ira Sohn Investment Research Conference in New York in 2010. He is believed to be the front-runner to buy the Carolina Panthers.

A source close to the process said Tepper stands above other bidders because of his personal wealth and because of his eight years as a minority investor in the Steelers. (He would sell his stake in the Steelers if he buys the Panthers.) Because Tepper has a 5% stake already, he has been vetted before and is expected to be quickly approved by NFL owners if he reaches an agreement with Richardson. League rules require three-fourths approval before a team can be sold.

Owners could consider the sale as soon as this month, if a deal is reached in time. The spring league meetings are scheduled for May 21-23 in Atlanta.

Tepper’s Appaloosa Management hedge fund firm is based in Miami Beach, Fla.

New York investment bank Allen & Co. has been handling the Panthers sale since the team went on the block in mid-December. Bidders for the team sign non-disclosure agreements with the NFL as part of the process.

Team owners and NFL executives expressed confidence at their most recent league meetings, in March, of having a buyer to vote on by the time of the Atlanta meetings. If a buyer is not ready by the owners meeting, they would likely vote by teleconference at a later date. Their next scheduled in-person meeting after Atlanta is in October.

Rick Burton, the David Falk professor of sports management at Syracuse University, told CBJ that, should Tepper succeed in his negotiations, he will be in extremely rare company.

“Becoming an NFL owner is entering the most exclusive private club in the world,” he said. “Essentially, there are only 31 other members in the club.” (The Green Bay Packers are publicly owned; there are 32 NFL franchises.)

Burton said Tepper, by buying the Panthers, will instantly lift the value of the other 31 teams. The most recent NFL franchise sale occurred in 2014, when the Buffalo Bills went for $1.4 billion.

The 81-year-old Richardson abruptly decided to sell the Panthers at the end of last season. In December, hours after Sports Illustrated published a story alleging sexual and racial harassment by Richardson and at least four financial settlements with former employees stemming from those incidents, the Panthers owner posted a letter to fans on the team website stating his intention to sell the team.

Richardson hasn’t addressed the allegations. The NFL is conducting an investigation into what has been described as possible workplace misconduct. Last month, one of his accusers wrote a scathing open letter — published by SI — to Richardson and the league about her treatment and the subsequent investigation.

Having Tepper and new ownership should help start the “steps to making the transition toward a better work culture” and beginning to shift the narrative, Burton told me.

Max Muhleman, who helped Richardson land the expansion franchise, praised Tepper as a good fit for the Carolinas. And, Muhleman said, his combination of financial security and hedge-fund expertise are suitable for owning a pro football team.

“Hedge fund managers thrive on business deal skills and being competitive,” Muhleman told me. “Those are (traits) that make for a good NFL owner.”

Tepper’s existing investment in the Steelers also bodes well. As Muhleman and others put it, few, if any, families and franchises in the NFL rival the Rooneys and the Steelers when it comes to prestige, legacy and popularity.

Industry experts came back again and again to Tepper’s finances.

Because he is worth an estimated $11 billion, according to Forbes, he won’t face pressure to instantly generate larger profits to recoup his investment.

Those circumstances could help reduce tensions surrounding the future of the Panthers-owned Bank of America Stadium, a 74,000-seat venue opened uptown in 1996.

Richardson successfully lobbied the city for $75 million of tourism tax money as part of an agreement reached in 2013 with local government to help renovate the stadium. The Panthers put in $102 million toward the makeover as part of a five-year, $177 million stadium phased renovation scheduled to be completed this summer.

Despite those upgrades, many have speculated on whether the next Panthers owner will demand a new stadium — and, as part of that demand, expect substantial taxpayer funding to build it.

City consultant Ron Kimble began telling City Council members even before Richardson decided to sell the team that they should keep a close eye on tourism tax revenue to prepare for either additional stadium renovation requests from the NFL franchise or, eventually, a new stadium.

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