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Broncos’ $4.5B Sale Price Represents an $837M Lost Opportunity for John Elway

Broncos’ $4.5B Sale Price Represents an $837M Lost Opportunity for John Elway article feature image

Via Dustin Bradford/Getty Images. Pictured: Former general manager and President of Football Operations of the Denver Broncos John Elway.

On Monday, Forbes reported that Walmart heir Rob Walton had won the Denver Broncos bid and would be paying $4.5 billion for the team.

While the news is premature on Walton, the $4.5 billion, which would be an American team sale record, does not seem to be far off.

And that has to make John Elway sick.

Elway’s passing on buying a piece of the Broncos 23 years ago goes down as one of the worst mistakes in business history.

In September 1998, then Broncos owner Pat Bowlen offered Elway, who had just led the Broncos to their first Super Bowl title, a 10 percent piece of the team for the money that they had owed him ($21 million). Bowlen sweetened the deal by offering another 10 percent of the team for $15 million.

He also made it seemingly impossible to refuse saying he would buy the piece back for $5 million more, plus eight percent interest a year up to five years later.

Elway would have 10 months to decide before the option expired.

Elway focused on football, won another Super Bowl in January and retired in May, which would have allowed him to pursue the deal.

But Elway would later say he didn’t see himself as an executive of the team, and therefore the deal didn’t make much sense to him.

June 1999 came and went and Elway passed.

Instead, he put his money elsewhere:

  • He gave $15 million to Sean Mueller, a Denver hedge fund manager, who a decade later was convicted after he took investors money in a ponzi scheme.
  • He invested in a Mike Shanahan-backed laundromat franchise, Hispanic media company Que Pasa, and sports retailer, all of which relatively quickly failed.

Elway wasn’t exactly short on cash.

In 1997, he sold his five car dealerships to Auto Nation for $82.5 million. But his prediction that he wouldn’t have an executive position with the Broncos wasn’t right. In 2011, John Elway became the Broncos general manager and held that role for a decade. And although he became the highest paid GM after winning the Super Bowl in 2016, getting a paycheck instead of being an owner had to be painful.

At the $4.5 billion valuation, John Elway’s 20 percent stake that he could have gotten for $36 million would have been worth $900 million today, a 1,330 percent return, factoring for inflation. He also gave up the rights of first refusal to buy the rest of the team.

All the details are known because when Elway’s deal became known, Edward Kaiser, the former Broncos owner who had sold the team in 1984, said that Bowlen promised him the first right of refusal on any deal and sued Bowlen. Elway could have comfort in saying the deal offered might have not come available to him because of the lawsuit. But Kaiser lost twice in court, meaning Elway — had he made the deal — could have prevailed over time.

Instead, the team he helped build on and off the field, and the value he helped create, isn’t reflected in his bank account.

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