Jon Bon Jovi’s letter to Buffalo Bills fans appears to have made matters worse for the rock star’s prospects for becoming the National Football League team’s next owner.
Fans, public-relations analysts and pundits ridiculed Bon Jovi’s attempt to deflect criticism of him as a carpetbagger who would move the Bills to Toronto. Sources close to other prospective ownership groups have told The Buffalo News they were thrilled to see the letter, largely viewed as crisis-mode desperation to generate support.
On top of all that, Bon Jovi’s letter might have violated terms of the nondisclosure agreement he signed with the Bills.
In fact, the only bidders who apparently have not breached the nondisclosure agreement so far are Buffalo Sabres owner Terry Pegula and his wife, Kim.
The Buffalo News has obtained a copy of the confidential nondisclosure agreement distributed by the Ralph C. Wilson Jr. Irrevocable Trust to prospective buyers. The document gives insight into the sales process and helps explain why there were only three known nonbinding initial bids submitted last Tuesday.
About 60 interested parties requested the nondisclosure agreement, a necessary first step to ensure confidentiality before reviewing the Bills’ financial information and entering a bid. But only 15 or so signed and returned them because of language that experienced businessmen and attorneys describe as restrictive and onerous.
Three sources who received the document from the Bills’ trust and an attorney familiar with sports-team transactions told The News the nondisclosure terms have had a chilling effect on the number of bids and likely has impacted former Bills quarterback Jim Kelly’s ability to get involved with a group.
“It’s not unprecedented,” said one knowledgeable source who reviewed the document. “But on a scale of one to 10, I would put the language in there at a 10 in terms of being ultra-restrictive.”
The terms that Bon Jovi might have breached, however, are standard.
Atop the second page of the six-page agreement, it’s stated that without prior written consent, no one who signs it may “disclose to any person (other than your representatives) that the confidential information has been made available to you or your representatives, this agreement exists or the terms hereof, you are considering the transaction or any other possible transaction with the company, or that discussions or negotiations have taken or are taking place concerning the transaction.”
Bon Jovi and billionaire developer Donald Trump, believed to be the only bidders aside from the Pegulas to date, have publicly declared they are “considering the transaction” since the non-disclosure agreements were signed.
B. Thomas Golisano, who sold the Sabres to Terry Pegula, declared his interest in the Bills before the nondisclosure agreements went out. It is not known whether Golisano has made a bid, but sources close to the billionaire Paychex founder have insisted he remains in the mix.
Ramifications for confidentiality breaches are not spelled out within the document.
Bon Jovi and Trump likely wouldn’t be eliminated from the sales process or penalized by the trust’s advisers – financial firm Morgan Stanley and legal firm Proskauer Rose – because there was no financial harm to the Bills.
But violations could alienate Bon Jovi and Trump from the Bills and the NFL.
The Pegulas, meanwhile, have been careful not to make any public missteps.
NBC Sports announcer Al Michaels reported during Sunday night’s Pro Football Hall of Fame Game between the Bills and New York Giants that Trump “offered $1 billion, all cash, no contingencies, immediate closing.”
“He’d have the check in one hour,” Michaels added. “He was a little miffed that it went out for bid again.”
Bon Jovi, in his letter to Bills fans, confirmed for the first time he was part an ownership group that wanted to buy the team.
“If we are given the chance to be the next owners of the Buffalo Bills,” Bon Jovi wrote, “I promise you that we will bring the same passion that you do every Sunday, every day.”
Bon Jovi also wrote his group is committed to work with local and state officials, hopefully to build a “state-of-the-art NFL stadium for the loyal Bills fans” and “to spend as much time on the ground in Buffalo as needed” to field a winning team.
Morgan Stanley spokeswoman Mary Claire Delaney declined to comment on possible non-disclosure violations.
Language in the nondisclosure agreement also spells out with whom prospective bidders are allowed to communicate and do business as they formulate a bid.
The agreement prevents possible buyers from sharing such confidential Bills information as financial statements, sales data, budgets and studies “with any other person, including other potential bidders and equity or debt financing sources ... regarding a possible transaction” with the Bills.
Not being allowed to communicate with “other potential bidders” prevents suitors from discussing even the possibility of joining forces to buy the team. Anyone interested in approaching as a minority owner would have to be rebuffed.
Kelly began speaking with prospective buyers about partnerships shortly after Bills founder Ralph C. Wilson Jr. died in March. But Kelly couldn’t talk to anyone who signed a nondisclosure agreement about the Bills. Nor would he be able to talk if he signed one unless granted permission.
Not being allowed to communicate with “equity or debt financing sources” stops candidates from sharing critical information with a bank for, say, a loan to buy the team.
One source who has brokered sales and purchases of sports teams in multiple leagues told The News this clause significantly limits the number of legitimate bidders to those who likely have the cash on hand to purchase the Bills on their own.
Another clause that has frustrated some in the process is a provision that forbids any contact or communication “with any executive, employee or representative of any of the trust, the company or the NFL concerning the transaction.”
That would include NFL Commissioner Roger Goodell, Bills President Russ Brandon or, technically, Kelly, who is employed as a Bills ambassador.
Meanwhile, Sen. Charles E. Schumer, D.-N.Y., who was in the Buffalo area Monday, said he his “still very optimistic” that the Bills will stay in Western New York and said he thinks a local bidder would have a greater commitment to keeping the team in town.
“All things being equal, I would prefer bidders from Western New York, because they’re committed to the area,” Schumer said during a news conference in Amherst. “But whoever bids, we’ve got to make sure it’s an iron-clad commitment.”
He declined to comment on the Bon Jovi letter.
“I’m still very optimistic that we can keep the Bills in Buffalo,” he said. “Not for seven years. Not for 10 years, but for generations, and the league understands the importance, I think, of keeping them in Buffalo.”
News Staff Reporter Denise Jewell Gee contributed to this report.