Blank of Home Depot fame offers up to $545 million
ATLANTA — Just four days after team president Taylor Smith vehemently denied reports a sale of the team was imminent, Atlanta Falcons ownership completed an agreement in principle to sell the franchise to Arthur Blank, the co-founder and former chief executive officer of the Home Depot chain.
The transfer of the franchise, founded in 1965 by the late Rankin Smith Sr., ends one of the longest-tenured ownerships in recent NFL history and represents the latest example of how difficult it is for a family-owned team to exist in the current climate.
The deal, which will be formally announced at a news conference Friday, is for between $545 million and $550 million, league and team sources told ESPN.com.
Rankin Smith paid a then-record $8.5 million for the expansion team in 1965. Forbes Magazine placed the value of the franchise at $338 million, among the lowest in the league, in a September article.
The sale ends Blank’s long pursuit of the team, which actually began about 15 years ago when he approached Rankin Smith about selling, and concludes the tenure of a family whose corporate name, “Five Smiths, Inc.,” involved Rankin Smith’s five children.
Taylor Smith, who succeeded brother Rankin Smith Jr. as team president in 1989 and was the last of the children connected to the day-to-day activities of the team, will not have a role in the new ownership structure. It is no secret in recent years his three female siblings — Dorothy Smith Knox, Carroll Smith Walraven and Karen Smith Owen — urged Taylor Smith to consider purchase offers.
Although the daughters of Rankin Smith Sr. served on the board of directors, they never drew a salary or collected dividends on their stock holdings.
“For all intents and purposes,” said a source in the Atlanta business community who is familiar with transaction, “the Smith name is coming off the family store. They are out, free and clear, and I’m sure it’s a bittersweet time for them.”
Blank, 59, will acquire the 88 percent of the team stock owned by Rankin Smith’s five children, the 12 percent that is split between minority shareholders John Imlay and Tom Watson Brown, and all the team’s assets. But ESPN.com has learned that Blank will subsequently take on minority partners and that Imlay, who along with Brown had right of first refusal on any stock sales, eventually will be part of the ownership group.
Sources said that, no matter the eventual ownership structure, Blank will maintain a majority of the stock. League rules dictate that there has to be at least one partner who owns 30 percent of the voting stock. Blank is one of this city’s highest-profile businessmen and is given to citing Vince Lombardi in speeches to Home Depot executives.
Along with his Home Depot partner Bernard Marcus, he co-authored the book “Building from Scratch.” While that might be not be altogether fitting for his newest venture, it is notable that the Falcons have never enjoyed consecutive winning seasons during the 36 years of their existence and, even with the respected Dan Reeves as head coach and vice president, are still viewed by many as a doormat franchise.
For years Imlay has said that, while he did not have the wherewithal to purchase the team himself, he would be able to put together an ownership group if the Smith family decided to sell the team. Imlay declined to comment specifically on details of the sale and Brown could not be reached. Given the terms of the deal, however, each man clearly declined the right to match Blank’s offer.
“But I will say this much: If the family had to sell, they could not have located a better man to sell to,” Imlay told ESPN.com on Thursday evening.
Imlay is a close friend of Blank and, in his words, has a “world of respect” for the new owner.
Imlay essentially brokered the sale by putting Blank and Taylor Smith together. After several discussions, Blank phoned Smith from Dallas on Monday and suggested the two men meet. They did, and the deal was hammered out over dinner.
The sale of the Falcons, rumored on and off since the death of Rankin Smith Sr. but always debunked by his children, still must be approved by league owners. It will take the endorsement of 24 of the 32 franchises, the mandatory 75 percent approval called for on such issues, for the team to pass into Blank’s ownership.
A high-ranking league official said Thursday night that Blank is still subject to an in-depth security check, which had not been completed. A vote on the franchise transfer might not take place until the annual league meetings, scheduled for next March 17-22, in Orlando, Fla. There is always the chance, though, that commissioner Paul Tagliabue will convene a special meeting, that a vote could be taken at the Super Bowl, or even that NFL owners could vote by telephone conference call.
Under any circumstance, it appears the transfer from the Smith family to Blank will not be completed for months. The daily activities of the team are not expected to be affected by the sale.
While league and team officials noted they are saddened by the pending exit of the Smith family — “Good people who tried hard and always did what was best for the NFL first and foremost,” said Dallas owner Jerry Jones — some acknowledged they are excited by the possibility of breathing new life into a moribund franchise with poor attendance numbers. Others allowed the profile of Blank will be a plus for the team.
The general feeling among the populace in Atlanta was that a change in ownership was long overdue. The team’s failings characteristically made the Smith family easy targets — at one game, Rankin Smith Sr. was jeered at halftime as he presented longtime Falcons star Mike Kenn with a retirement gift — and most patrons felt new ownership was the only hope for improving the plight of the long-suffering Atlanta fans.
“There’s only been one constant with that team, the Smith family, and this should be a catalyst to get people excited again,” said longtime fan Bert Johnson. “People got tired of the losing and blamed it on the Smiths, to the point where they could do no right.”
Amid media reports that Blank had offered $500 million for the club, Taylor Smith said Sunday that the franchise was not for sale. He has been, in recent months, adamant that the Smith name would remain on the ownership documents while conceding that a restructuring of the stock holdings might be forthcoming. One hangup to even a partial sale of the stock was that the estate of Rankin Smith Sr. had yet to be settled.
The IRS recently completed its valuation of the team at the time of the elder Smith’s death, though, and that accelerated the probating of the estate. With that major hurdle finally navigated, there were no remaining technical reasons why the team could not be sold. Rankin Smith Sr., who made most of his fortune in the insurance business, actually planned well for his heirs and often noted he had taken steps to avoid the kind of disasters that had plagued other family-owned NFL franchises.
“Because of Rankin’s foresight, this wasn’t a deal Taylor was forced to make,” said one source close to the team. “This was a deal Taylor couldn’t so no to, because Blank kind of blew him away.”
It is believed that Taylor Smith rejected Blank’s offer of $500 million within the past few weeks. At a dinner earlier this week, though, Blank raised the ante by about 10 percent and Taylor Smith was then hard-pressed to ignore the offer.
The purchase price is far less than the $820 million Daniel Snyder paid three years ago for the Washington Redskins, but that deal included a stadium.
Len Pasquarelli is a senior writer for ESPN.com.
