The National Football League Inc (NFL) is negotiating the pu…
The National Football League Inc (NFL) is negotiating the purchase of the National Collegiate Athletic Association, Inc. (NCAA). NFL is primarily interested in the revenue potential of the NCAA trademarks, event media rights, and apparel royalties. Therefore, transferring the media and event contracts is a critical aspect of the deal, and keeping the NCAA as an ongoing entity is also important because the brand has cache and the NFL does not want to go through the hassle of re-registering the name. However, NFL is worried about the liability exposure of various existing and potential lawsuits stemming from player health risks and employment law issues regarding the amateur status of the NCAA athletes. NFL would also like to utilize the 2020 operating loss that the NCAA experienced due to the impact of Covid-19 on their operations. NCAA would like to participate on the potential upside of the combined entity and defer the impact of taxes on the transaction. However, the NCAA does want some portion of the transaction to be cash to distribute to the member schools (no more than 20%). What legal structure would you recommend for the acquisition to best address NFL’s desires?