How the Jed York Embarrassment Could Accelerate a 49ers Sale

49ers CEO and Principal Owner Jed York was caught in a sting operation for soliciting prostitution, and it would seem that he will be forced out of the position and public view. Near term, this should not have an impact on the field, business as usual with Kyle Shanahan calling the shots on the roster.

The NFL is expected to suspend and fine York. In a case that isn’t linked to football operations, it’s highly unlikely the team would be forced to give up draft picks. The larger question is how will Denise DeBartolo York and Dr. John York react to this development?

The immediate move is to have CEO and President Al Guido step in to represent the team, as he did at a recent NFL owners meeting in Atlanta. Guido operations, Shanahan football, a clear delineation is what both the Yorks and Shanahan want.

That’s an interim solution, whether it could become a permanent one, to be determined.

Looking at this from a human perspective, Jed’s parents built this role for him, and he has now proven unworthy of it. Every day they see someone else in the CEO chair will be a reminder of how that ended. Jed is spiraling, and the family has already absorbed a tragedy: his brother died by suicide in 2018. His twin sisters, meanwhile, are involved in the 49ers charity and run a winery. The Yorks may decide it’s best to move on from football and pivot.

What triggers a sale?

Recent sports franchise sales have broken records. The Lakers for $12.5 billion, the Seahawks for $9.6 billion led by former 49ers minority ownership partner Vinod Khosla, who must divest those shares before taking over in Seattle.

An immediate team sale would look like a reaction to Jed’s arrest. The Yorks will need sufficient time between a sale and Jed’s dalliance. Most current market valuation estimates say the 49ers could be sold for $11.5 to $13.5 billion. Given that the DeBartolo family bought the 49ers for $13 million, it would be a full-circle moment to sell the team for $13 billion, as a family milestone, and as the most anyone has paid for a sports franchise.

So my guess is the sale could be determined by when someone offers $13 billion, as opposed to a specific timeline. That could happen within a year, if not sooner. Then it’s on the Yorks to determine how long they want to continue to hold the asset.

I believe what happened with Jed does give the Yorks new motivation to sell, when in the past they thought this would be the long-term role for him. My point is the potential sale window likely only opens when the Yorks are assured behind the scenes that a bid of at least $13 billion would be made.

Who could buy the team?

Joe Lacob of the Warriors would likely be interested. So too Oracle’s Larry Ellison, who made a bid for the Warriors, though Ellison’s age at 82 would factor in depending on when the Yorks would look to sell.

The most likely suitors are the existing minority ownership partners. Byron Deeter, partner at Bessemer Venture Partners; Will Griffith, partner at ICONIQ Capital; and Pete Briger Jr., managing partner and board chairman at Fortress Investment Group.

Khosla is expected to sell his 3.1% shares in the 49ers either back to the Yorks or to the minority partners collectively. A private equity firm or new partner can’t be ruled out though.

Former players Steve Young, Brent Jones, and Ronnie Lott have expressed past interest in ownership and could join a group looking to purchase the Niners. Any of the three would have instant credibility as a voice of ownership with football ties, taking the Jed York role. Presumably a group involving former players could gain an advantage in winning the bid.

Importantly, if the players did join a group that acquired the 49ers, all three of them would turn to Eddie DeBartolo for advice on how to run the team. The current money-first goals would therefore likely shift to a ring. But that hope needs to be dialed back; the Yorks have made no indication they are looking to sell anytime soon. I am guessing that Jed’s failure may accelerate their timeline, and where no desire to sell may now change.

This serious lapse of judgment by Jed York will change the team. Not on the field in the near term, but it could impact when his parents choose to sell the Niners, which in turn can change everything.

If the Yorks sell to a group that includes former players, I think that represents a possibility for the change that is needed most, for Shanahan to be kept as head coach but replaced by a general manager with final personnel authority. Until then, Shanahan will be extended and have free rein over all 49ers personnel decisions.

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