Jim O’Donnell: Why the NFL’s new private equity rules could steer the Bears back to Arlington Park

THREE YEARS AGO THIS WEEK, the Bears announced a $197.2 million purchase-and-sale agreement with Churchill Downs Inc. to buy the 326 acres that once housed Arlington Park.

Palpable excitement reigned in the Arlington Heights-Palatine-Rolling Meadows corridor.

The franchise was actually suggesting a cobweb-shaking formation that might even thrill the nation.

Seventeen months later — Feb. 15, 2023 — George McCaskey and associates let it be known that the PSA was completed and that the team's “sole focus” was on developing the choice AP land.

That plan was sidetracked last April when team president Kevin Warren defied waves of coherency by unveiling an against-all-odds scheme to get the Bears a new stadium on Chicago's inviolate lakefront. That billion-dollar baby came with a proposal for hundreds of millions in public money.

Now, new NFL rules allowing private-equity investment in franchises could help push the Bears back to Arlington Park.

There are speculative aspects. Nothing is confirmed. But it is believed that the Bears, along with the Bills, the Chargers and the Eagles, are first-wave NFL targets for institutional investors.

The infusion of new money could bring more than $640 million to the families currently participating in Bears ownership. Propelled by the new associates seeking accelerated profits, the Bears could be leaving no stone unturned in exploring new revenue sources.

And they hold no untapped profit stones greater than those involving the green acres of Arlington Park.

WARREN'S FOLLY LEFT the organization in a far-too-typical McStupor.

The Arlington land still offers McCaskey and checked mates a fresh and golden easel. No NFL team owns more undeveloped prime terrain.

The lakefront gambit looms as nothing more than a protracted and unwinnable war.

THREE WEEKS AGO, league members finally caught up with America's four other marquee professional sports groups — the NBA, the NHL, Major League Baseball and Major League Soccer — by voting to allow institutional investment in franchises.

That means even as underachieving a business as the McCaskey Bears can take on a silent partner to increase liquidity and bring more sophisticated forward thinking to the open windows of crusty Halas Hall.

The key governing points are:

— No more than 10% of a franchise can be sold (and no less than 3%);

— The minimum term for a private equity firm to hold a position is six years; and,

— The investment entity has no formal say in a team's operation or seat at any directorial body.

But what a private equity firm can do is “passively” assist an NFL organization in maximizing profits.

NOW ENTER AN OBSCURE FORMER BEARS QUARTERBACK named Chad Hutchinson.

The Stanford grad started five games for Lovie Smith during a dismal 5-11 campaign in 2004 — spelling Rex Grossman and fellow footnotes Craig Krenzel and Jonathan Quinn.

That was then. Now, Hutchinson — age 47 — is a partner in Arctos. The Dallas-based capital firm is one of only four certified by the NFL to be among the first batch of its institutional investors.

(The others are: Ares Management, Sixth Street Partners and a consortium of four smaller concerns that includes Hall of Fame running back Curtis Martin.)

Hutchinson is sharp and media-friendly. In interviews since the new investment rules last month, he's made it clear that capital-growth firms such as Arctos will first be looking for NFL businesses in need of cash and other financial muscle that might also have dormant or underperforming revenue points.

A rare commodity, according to Hutchinson — and Arlington Park payoff dead ahead:

Stadium-adjacent real estate.

HE'S TOLD MEDIA: “All of our teams want to go and build real estate, because that's how you activate the space around your arena in the period between games, whether that is through hotel, retail or even multifamily housing.”

A new Bears stadium at AP would require less than 100 acres. That would leave more than 200 for additional enriching development.

If the lakefront pipe dream was to reach fulfillment, remaining acreage for the team to develop near the new Soldier Field site with sole Bears ownership will be zero.

IN 2021, ARCTOS INITIALLY TARGETED $3 billion for sports investment. A few months ago, it upped that ante by another $4.1 billion.

The company already has an expanding portfolio of minority shares of professional teams and other sports interests including the NBA's Warriors and the Los Angeles Dodgers.

The latest informed valuation of the Bears is $6.4 billion, no better than 10th in the 32-team NFL. (The Cowboys are No. 1 at $10.8 billion; the Bengals are No. 32 at $4.7 billion).

The laggard performance of the Bears is black gold waiting to be drilled. Especially since their Chicago domain remains the most-populated single-team market in the league.

Is it any wonder prized rookie QB Caleb Williams will likely once again take a pounding this afternoon, today at Indianapolis (noon, CBS, to only 8% of the nation)?

MAXIMUM PRIVATE EQUITY INVESTMENT in the Bears right now would be approximately $640 million.

The shakiest residual is that the cash injection could likely guarantee subsequent generations of McCaskey-Halas heirs maintaining controlling interest of the franchise deep into the current century.

Family members now driving Hyundai SUVs could suddenly be tooling around Sunday masses in Porsche Cayenne Turbo GTs.

A GRAND UPRIVER GAIN WOULD BE having the ex officio brains of newly vested sharp money people and their lending assets available to the executive shufflin' crew at Halas Hall.

The five-month lakefront stalemate known as “Warren's Folly” would be abruptly ditched. The vastly more profitable option of Arlington Park would finally move forward.

Which is exactly where all palpably excited Bears fans came in three long years ago.

All now once again ready to embrace a fresh cobweb-shaking formation.

That might even thrill the nation.

Jim O'Donnell's Sports and Media column appears each week on Sunday and Wednesday. Reach him at jimodonnelldh@yahoo.com. All communications may be considered for publication.