The insanity in the Raiders front office has been laid bare for all to see. There is the nearly year-long soap opera of Lane Kiffin's job security, but beneath the surface, the problems run much deeper. The comical near-altercation between a Raiders executive and a reporter only serves to punctuate the depth of the dysfunction.
Apparently, the fans are not the only ones who are sick of it all. The limited partners in the Oakland Raiders are reportedly making some noise in league circles that it may be time for Al Davis to be deposed.
The idea that part of the financial stake of the Oakland Raiders is finally making a move would seem to lift the spirits of the disheartened Raider Nation. The question is whether or not a coup d’état against Davis would be successful. The answer is that it would be extremely difficult.
The Oakland Raiders ownership structure is a two-tiered partnership, meaning there are two type of partnership shares. There are the general partner shares, which are the shares that have the power. Only general partners are allowed a vote, and when last made public, Al Davis owns all of those shares. The other type of shares are limited partner shares, which allow for a share in the profits but no control whatsoever.
The upshot of this is that through conventional means, even if every partner not named Al Davis were to vote to remove him, he could just laugh and extend a one-finger salute. When Davis maneuvered his way into being the sole power of the Oakland Raiders back in 1972, he insured that he was essentially dictator for life.
Al Davis being deposed via a shareholder revolt would be a fitting end to his tenure as the "President of the General Partner," as it was through Machiavellian machinations he was able to ensure that he would have that title for life. Back in the early '70s, there were three general partners who had equal voting rights: Wayne Valley, Ed McGah, and Al Davis. Davis had been brought into the partnership by Valley after Davis's stint as the commissioner of the AFL. By the early seventies, Valley had grown wary of Davis and had planned to have him replaced when the partnership agreement was to be redone in 1976. Davis, knowing that he had fallen out of favor with Valley, cozied up to McGah who to that point had not been active in running the team.
Whilst Valley was out of the country attending the Olympics, Davis struck. He was able to convince McGah to agree to a changed partnership agreement that insured that Davis could not be removed. It only took two out of the three partners' votes to amend the deal. Valley was livid, and he sued Davis to have that change removed. Valley lost and ultimately sold his stake in the Raiders, having been broken by Davis.
The limited partners do not have the statutory authority under the partnership agreement to amend the agreement in a way that would force Davis out as he had done to Valley. In fact, the limiteds don't have any say over Davis or the day-to-day running of the team. Basically the limited partners have two options for regime change in Oakland:
- The Legal Option:
The limited partners could join together in a lawsuit to have Davis removed claiming incompetence and mismanagement. There are two problems with this scenario. The first being that Al Davis has spent more time in courtrooms than the owner's box and has a team of lawyers instantly at his disposal. Essentially there is little for the limited partners to stand on as most of them bought their shares well after Davis took over. This option is really a long shot at best, although it would further marginalize Davis in the minds of the Raider Nation.
- The NFL Option:
This option actually has the better chance of success. As the owner of the Oakland Raiders, Al Davis is 1/32 owner of the NFL, but he is also a franchisee of the NFL. What that means is that despite the fact that Davis is dictator of the Oakland Raiders, he has to abide by the bylaws and contracts of the National Football League. In the normal context of football operations, this means that he has to obey the salary cap, rules of free agency and draft order. However, if the limited partners can convince the NFL leadership that Al Davis is no longer running the team in a manner consistent with league standards, theoretically the league can step in. If the league in concert with the limited partners were to make a move against Al Davis, the litigation would commence immediately.
If the limited partners are truly coming together to try to make a move against Al Davis, this would explain the reports that Davis is confiding in fewer people around Raider headquarters. He has long been known for his paranoia, but if there are people around the organization who are looking to make a change, it does make sense. The limited partners do have a stake in the Raiders success on and off the field in the form of capital investment, so they are likely the only ones who may have the power to affect change in the organization.
Comments
Thanks for this article. I've been a Raider fan since 1968 and it pains me to have to say that I've lost faith in Al Davis. I think his passion for the team has been supplanted by his paranoia and if someone doesn't depose him, he and the franchise will go down together. Never thought I'd hope for an NFL intervention with my team, but I have to admit it's the most palatable scenario at this point. Sad state of affairs.
Interesting article.
Can the general partner and limited partner shares
be expressed in a simple percentage pie chart? Does the general partner have exclusive decision making power even without a 51% majority?
You wrote, "When Davis maneuvered his way into being the sole power of the Oakland Raiders back in 1972..." You mean 1963, right? He became the Raiders Head Coach in 1962, took them to the AFL Championship (a 10-1 record), and then bought all the shares of ownership to the team in 1963. He had to temporarily remove himself from the Raiders when he became the AFL Commissioner; which is where the "other" partners came into play.
You wrote, "Back in the early 70s, there were three general partners who had equal voting rights: Wayne Valley, Ed McGah, and Al Davis." No, there were 7 partners.
Good article though
There are a few more options for the LP'ers.
* They can in unison cash in their shares as a sign of no-confidence. But this has to be followed up with an endgame of some sort. If Al had to borrow to fund the buy out, that might put him in enough of a shaky financial position to create concessions. Any subsequent lender (or limited partner) could thereafter impose credit or investment conditions tying the loan / capital to covenants or financial disincentives or ownership control or ownership behavior, like the appointment of a trust or other fiduciary to the team. THis is what active shareholder hedge funds do, threaten to divest if they do not get control concessions.
LP'ers can also spend the partnership income they get on buying tickets but leaving stands empty. Imagine the announcers spending all game talking about how the stands are empty (potentially while the team is winning). The NFL could not let that happen because of its image.
Finally, LP'ers can begin to conspire with Al's son, the heir apparent, to force a change in Al's position. I love my 82 year old mother like the dickens but I know when she's off base and because I love her and care for her I tell her the truth when it is evident. If Al's son is made of anything, he will at least begin a discussion, or if he has already done so, he can advance the topic.
Fans can do something as well. I am imploring other teams' fans to go to keepkiffin.com to sign the petition and leave comments that they really feel sorry for us and can't understand why Al is so peculiar. My best friend, a Steeler fan, promised to do so and spread the Steeler karma to the Nation (after first acknowledging it was difficult for a Steeler fan to do). I convinced him that it would be fun to look down on us.
Nate- Al Davis was the coach/general manager starting when he was brought on board prior to the 1963 season. Davis didn't get any ownership stake until he returned from his time as commissioner.
Rocky- The limited and general shares are completely different.There is no way to pie chart between them, as the only the general partners have any voting power.
Who are the partners? I would like to send them one of my emails and maybe even the petition from Keep Kiffin .com. This is very important at this time to make this situation become reality!
Davis must go!!!
Nice job Patrick. Your writing has come a long way.
After buying out the family of his last partner that had passed on Davis owned the Raiders outright.
The limited partners have two options sell if they can and I bet Davis has right of first refusal or shut up.
You sir, are no Raider fan. I used to think differently of you, now... not at all.
Maverick
go ahead shoot the old dude
Keep in mind if other owners take a position against Al and his ability to run his football team Al would have the same ability against other owners who may not be very good at running a team such as Detroit, who have been around longer then the Raiders. I don't think the Owner whould attmept to judge ability to run teams when Al is sitting with 5 trips to the superbowl and three trophies sitting in his office for winning it, so its back to Al and the language in the partnership. Al has everyone by the balls and it will not change even if he dies. Mark is next if that happens. The Raiders are going through a very ugly period in their history but doesn't every team? some longer then others. Al will continue to run the team and be as sick as his fans that they are not winning, and finally we will begin to get lucky and start selecting good players (like other teams get lucky) and they will have a winning run for a number of years. It will happen but the question is when. Al will get it turned around. The patriot got Brady and never in their wildest dreams did they know what they had, and the other players and attitude fell into place. Don't forget their coached sucked before he got the players. It all runs in cycles and ours hasn't started yet, but it will. However, it hasn't been fun waiting for our turn. Football is Al business and he understand what is needed he is not some owner who came from the dot com area of business who thinks he knows football, just look around the league. Most other teams still can't see talent or know a good coach from a bad coach, so at worst its even in ownership. Richardson and Jones are problably the closes owners who really came with any kind of football understanding, and one just played in college and the other in the NFL..
THE OLD MAN SHOULD STEP DOWN AND LET ME RUN THE RAIDERS.. I HAVE SO MANY FRESH AND NEW IDEAS JUST LIKE KING AL HAD BACK IN THE OLD GLORY DAYS, SERIOUSLY!! NO MORE OVER PAYING GUYS AND BRING IN PLAYERS WHO REALLY WANT 2 WIN SUPER BOWLS, SERIOSLY.
hanks for doing something I couldn't. Get evidence that the NFL is fixing Raiders' games so the fans will turn against Al Davis. Since you evidently agree with the league and these crooks who bought some of the team to steal the Raiders from Al at least you can help me inform the Nation about this crap.
All the none sense on the field finally makes sense. Al is being assaulted inside and out by traitors and crooks. If the league ever got control of the Raiders the fans would be the 2nd to suffer the city of Oakland would be the 1st.
Where do you think the NFL would be without Al? All the front office has ever done is find ways to squeeze revenue out of fans and NFL cities. Al integrated coaching and other wonderful things. People like Robert Kraft and Paul Tagliabue only care about cash and power.
I hear NFL, ESPN, CBS and Fox football commentators say this: The NFL is better when the Raiders play well. The NFL option to intervene is the way to go. Al is done and the standards by which a 'competitive' team represents the NFL MUST be looked at by the Commissioner. The NFL 'brand' has a sour spot in several markets and must be addressed.
The league will not take action for many reasons:
One- The last time they lost in trying to prevent the Raiders for moving, they are 0-1 as plaintiffs.
Two - Most of the owners will not go against him because if this was possible it would have been tried when Tagliabue was commissioner.
Three - Roger the Commish is not like Rozelle and Tags, he has "no dog in this fight".
Sorry, but Davis stays but nice attempt to explore unfeasible options.
Here it the problem of revenue sharing. I know that revenue sharing makes all NFL team to be competitive but it makes stupid team owners to survive with out improving their franchises as well. If there is no revenue sharing Al Davis will be bankrupt the way he spend the little income he gets from the league. Cause, let's face it that with no one attending his game and all black out where is he gonna get the money. In short he will die.
So take revenue sharing away and more clown owners like him, Ralph Wilson( bills), Brown (Cincy) will lose their team or improve.
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