Pakistani Engineer to Become New Owner of NFL Team, The St. Louis Rams

Posted on February 12, 2010
Filed Under >Adil Najam, Pakistanis Abroad, People, Sports
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Adil Najam

News has it that Pakistani engineer and entrepreneur Shahid Khan is all set to strike a mega deal to become the new owner of the NFP (American) football team St. Loius Rams. I must confess that I do not follow the NFL as so many others do. But this I know: this is a big deal. All pun intended.

Just how big a deal, you ask?

In dollar terms its a deal worth between $450 million and $750 million (depending on whether he buys a 100% stake in the team or a 60% stake). But as in all things sports – and especially in a sport like American Football (where fans can be especially fanatic) – the stakes are much much higher than that. (For the more politically inclined, the Rams is the same team that right-wing commentator Rush Limbaugh was rumored to have been interested in when great public outcry against that idea was raised because of his views on African Americans in sports). Here are the details from the website of the St. Louis hometown newspaper (The St. Louis Post-Dispatch):

Rams owners Chip Rosenbloom and Lucia Rodriguez have entered into a signed agreement to sell the team to Shahid Khan, multiple NFL sources told the Post-Dispatch late Wednesday night. Khan, 55, is the president of Flex-N-Gate Corp., an auto-parts manufacturer based in Urbana, Ill. Khan has lived in the Champaign-Urbana area for more than 40 years and is married with two adult children. Khan is a graduate of the School of Mechanical and Industrial Engineering at the University of Illinois. According to league sources, Khan will purchase the 60 percent of the team owned by siblings Rosenbloom and Rodriguez, who inherited the franchise from their late mother, Georgia Frontiere, in early 2008. NFL owners must approve the sale.

Stan Kroenke owns the 40 percent remaining, and it’s unclear if Kroenke plans to retain his share. If Kroenke wants to be bought out, sources say Khan is likely to do so, and that would make him the 100 percent owner.  Kroenke also has the right of first refusal to buy the Rosenbloom-Rodriguez 60 percent, but current NFL rules barring cross ownership prevent Kroenke from taking over as the team’s majority owner. Kroenke owns the Denver Nuggets in the NBA and the Colorado Avalanche in the NHL. To buy a controlling interest, Kroenke would have to persuade the NFL to change its ownership rules.

Multiple league sources describe Khan as an enthusiastic Rams fan who has attended home games at the Edward Jones Dome. League sources say Khan is committed to keeping the team in St. Louis — and that was an important consideration to Rosenbloom and Rodriguez in making their decision to sell to him. The Rams will probably be able to vacate their lease agreement after the 2014 season, but sources say Khan is willing to work with local leaders in an effort to assure the team’s long-term future in St. Louis. A source noted Khan’s deep and stable roots in central Illinois as a sign that he wants to own an NFL franchise in St. Louis — and in no other market.

Of course, one wants to learn more about Shahid Khan himself. Once again, the St. Louis Post-Dispath has all the details. After all, Mr. Khan is the biggest story in St. Louis today – bigger, even, than Mr. Clinton’s health scare today:

Shahid Khan’s rise from immigrant student to wealthy entrepreneur to prospective new owner of the St. Louis Rams began with an automobile bumper. Khan, a native of Pakistan, came to the U.S. in 1967, at age 16, to attend college at the University of Illinois at Urbana-Champaign. He graduated in 1971 with a bachelor’s degree in industrial engineering. While still a student, he went to work for a local auto parts manufacturer called Flex-N-Gate. There, he was assigned to develop a new kind of bumper. He kept working on the idea after starting his own one-person parts business in 1978. What he finally came up with was a lightweight, one-piece bumper with no seams to rust.

His design was such a success with automakers that, by 1980, he was able to buy the company where he had once worked. Today, Flex-N-Gate has manufacturing facilities all over the world and is a key global supplier to automakers. Khan, 55, and his wife, Ann Khan, have remained in Champaign, where he has regularly collected awards and positions from the university. He has reportedly given millions to the school, including funding a 2007 major expansion of the university’s tennis facilities — now called the Shahid and Ann Khan Outdoor Tennis Complex. Khan has declined to speak to reporters, but those who know him say he has remained humble despite his extraordinary success.

“I think that the Rams are extremely lucky to have an owner like Shahid Khan,” said Peter Bannon, who lives two doors down from the Khan family in Champaign. “He’s one of the most intelligent people I’ve ever met.” Bannon said his neighbor is very active in the community and has no doubt he’ll be able to steer the Rams in the right direction. “If there’s anybody who can turn the Rams into a Super Bowl champion, it’s Mr. Khan,” Bannon said. Urbana Mayor Laurel Prussing described Khan as “an upstanding citizen. He and his wife are very active in the community. “I had no idea he was interested in buying a football team. I’ve always associated him with his business,” said Prussing, who has crossed paths with Khan through his civic activities. “He’s a quiet man. Not real flamboyant. He just gets the job done.”

In a speech in 2000, Khan said his secret to success was heeding the lessons of ancient Chinese philosopher Sun Tze, whose book “The Art of War” gave advice on how underdogs can win against more powerful adversaries. That may sound promising to Rams fans who wonder what kind of owner Khan will make. However, the title of his lecture that year might give pause: “Fumbling Your Way to Success.”

Khan’s American success story has had some controversy, too. He’s currently challenging the IRS over $68 million that the government collected from him in taxes that he says he shouldn’t owe. He’s also suing several financial advisers, claiming breach of fiduciary duty and professional malpractice for advising him to take advantage of tax shelters that the advisers knew were under investigation by the IRS. The litigation against the financial advisers, pending in Champaign County Circuit Court, allege Khan lost “significant” money as a result of the advisers’ actions. The next motions in the suits are scheduled for next month. In an interview last year with a Champaign newspaper, Khan complained that a Forbes magazine article about his tax problems was a “hatchet job.”

Purchasing the Rams would not be out of character for Khan, who has made a living buying distressed companies at bargain prices. The Rams, coming off a 1-15 season, certainly seem to fit the description of a troubled franchise. And the price may very well be right, with some experts suggesting a realistic sales price will be in the $750 million range, well off the $929 million that Forbes magazine has estimated the franchise to be worth. Flex-N-Gate, which makes a variety of plastic and metal parts for a host of automakers, hasn’t exactly been in growth mode in recent years. This isn’t surprising given the wretched state of the U.S. auto industry. According to Forbes, the company ranks as the 229th largest private company in the country. A year earlier, it was number 155, according to the publication. The sprawling company, which employs 11,500 workers, has operations in eight states — including Illinois, Michigan and Indiana — as well as Argentina, Canada, Mexico and Spain. In 2007, its Ventra Group subsidiary opened a small plant in Pacific to supply parts for Chrysler’s Fenton plants. But Flex-N-Gate’s website no longer lists the Pacific plant among its operations.

Illinois and federal campaign records indicate Khan is a modest financial supporter of Republican politicians.

As I said, I am myself not much of an NFL follower. It is unlikely that this news will make me one. But it is quite clear that lots of folks, especially but not only in St. Louis, will be following Shahid Khan very very closely from here on. I, too, will keep an eye out.

Good Luck, Mr. Khan!

31 responses to “Pakistani Engineer to Become New Owner of NFL Team, The St. Louis Rams”

  1. Andrea says:

    Growth is not only nurtured for the company but for it’s employees as well. Shahid remembers his own climb to the top and encourages his employees to do the same regardless of rank, race or sex. I spent over a decade working for Flex-N-Gate and have much experience within the company. I started as an uneducated employee working on a production line. I wasn’t satisfied with my life situation and FNG paid for me to go to college. Literally 100% of my tuition was paid in full. My only stipulation? I had to have a major that could be applied to work within FNG and maintain a minimum 3.5 GPA. If I had made between 3.0-.3.5 they would have paid 80%. FNG also offers many other incentives for in-plant growth and other company funded educational opportunities. After a decade of service I became a mother and made the difficult decision to stay home with my new son. I left the company not as a production line employee, but as part of their Corporate Management team. This was an experience that I could not have received with any other company. I will also say this, Mr. Khan is a real person. He earned everything he owns. He has a real family and a real personality. When he visits the various plants he is not above speaking to or associating with any of his employees, regardless of their position or rank . I have only the highest regard for this man.

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