The daughter of George “Papa Bear” Halas, Virginia McCaskey, has controlled the Chicago Bears football franchise since 1983 when her father died leaving her 80% controlling interest in the team. When Papa Bear founded the franchise in 1920, he did his best to devise a plan to keep ownership of the team under the family’s majority control in the face of U.S. federal estate taxes obligations that seek to derail that dream.
While she attends every Bears game with the family, in between downs and at halftime, I would guarantee Mrs. McCaskey is thinking about what will happen to her stake in the franchise after she dies and whether her estate will need to sell her team shares to satisfy her looming federal estate tax bill. While the team is value at roughly $3.58 BiL (seventh most valuable team in the NFL), Mrs. McCaskey’s estate is believed to be facing a huge estate tax bill since she owns 30% of the team in her name and through holding companies (value $1.074 BiL) while her 11 children and 2 grandchildren of her deceased brother are believed to each own 3.8% of the team.
If McCaskey divides her 80% stake amongst her 11 children, they would each control a 6.6% stake which is less than the at least 10% share requirement that NFL lead owners must maintain in their team’s stock. Just like heirs’ interests in real property, unless Mrs. McCaskey creates a plan of succession by way of a series of family trusts, the McCaskey family’s majority control will be difficult to maintain as the family’s ownership shares will continue to be divided among the growing pool of family heirs who may have differing views and opposing interests.
In addition to coming up with a plan to cede control and ownership of team shares amongst family members, Mrs. McCaskey must also contend with her co-owners, prominent businessman, Pat Ryan Sr. and his friend Andrew McKenna Sr. who collectively bought 19.7% percent of the franchise back in 1990 for $17 million. Ryan and McKenna own the first right of refusal if McCaskey elects to sells shares and they may be looking to buy a greater share of ownership in the team if McCaskey’s estate needs to cash out in order to pay federal estate taxes.
The fact is federal estate taxes are meant to penalize billionaires and could quickly catch up on Mrs. McCaskey forcing her to sell shares in the billion-dollar franchise. While I’m sure attending the games with VIP access is thrilling for the family, once the heirs get that Estate estate tax bill after Mrs. McCaskey’s life, I’m not so sure they will think their team’s 13 playoff appearances and 2 Super Bowl appearances over the last 38 years (since Mrs. McCaskey took over ownership of the franchise) has been worth the expense.
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