The completion of a due diligence report into the Minnesota Vikings and team owners Mark and Zygi Wilf has inspired new-found faith in the team’s viability as a partner on the $975 million stadium project. The report, released by the Minnesota Sports Facilities Authority (MSFA) on Friday afternoon, was undertaken following a New Jersey judge’s ruling against the Wilf brothers in a business fraud case that dates back more than two decades.
After a thorough review by outside attorneys and accountants, MSFA chair Michele Kelm-Helgen said the investigation did not produce any findings that would prevent the stadium construction from advancing as planned.
“I feel confident moving forward with the construction of the new stadium,” Kelm-Helgen stated.
MSFA employed its counsel, local law firm Dorsey & Whitney, to look into the legal claims against the Wilfs, and to project how that suit could affect the Wilf brothers’ financial status as the team’s principal owners and chief negotiators with the state. Attorneys combed through court documents and interviewed lawyers who had worked on the case, as well as legal analysts. That work turned up only one possible pitfall: Under New Jersey law, any case that results in the awarding of punitive damages will be referred to the state attorney general, who has the option of opening a criminal investigation.
With that in mind, Kelm-Helgen hedged her optimism about the Wilfs, though only slightly.
“The review is based on what we know through today’s date,” Kelm-Helgen said. “There is no way for us to know the outcome of any future investigation at this time.”
Perhaps more important than the personal inspection of the Wilfs were assurances the MSFA received from the National Football League. In August, Kelm-Helgen took a trip to league offices in New York to meet with NFL executives, who later agreed to make league documents available to the authority’s legal team.
In a September 13 letter sent to both Kelm-Helgen and Zygi Wilf, NFL Commissioner Roger Goodell writes that the league is firmly committed to supporting the Vikings stadium project, as evidenced by a $200 million loan commitment toward construction costs.
“The NFL has repeatedly demonstrated its commitment to the Twin Cities community,” Goodell wrote, “most recently by making a substantial financial commitment to the stadium project.”
In his letter, Goodell states that, should the Vikings ownership change hands for any reason, the NFL would force the new owners to abide by the terms of the lease agreement signed by MSFA and the Vikings, adding that the NFL would block any new owner’s move to take the team to a new city.
“Moreover,” Goodell writes, “league rules would not permit a team to relocate in violation of an existing lease, and any request by the Vikings to relocate would be expected to comply with the terms of the team’s lease with the Authority.”
Aside from the legal review, the MSFA also commissioned a financial audit conducted by FTI Consulting, a firm that specializes in forensic accounting. According to a letter from Peter Carter, the Dorsey & Whitney attorney who oversaw the due diligence process, FTI found the Wilfs to be financially sound, even in the event of a “worst case scenario” ruling in the New Jersey lawsuit.
“The significant holdings in cash and securities at July 31, 2013 by the Wilfs, buttressed by significant equity in investment properties also owned by the Wilfs, are considered to be reasonable and adequate to allow the Wilfs to meet their planned financial obligations under the planned Vikings stadium project,” Carter wrote.
That generalization is as much detail as the MSFA report contains about the Wilfs’ finances, as the team negotiated secured strict privacy protections in the legislation behind the team’s partnership with the state and city of Minneapolis. They might still be subject to public disclosure, though, with New Jersey Judge Deanne Wilson signaling earlier this week that she would allow information about the brothers’ net worth to become public. The Wilfs have appealed that ruling.
Friday’s release should clear the way for renewed lease and operation talks between the MSFA and the team, which had refused to continue negotiations until the authority had completed its review. Groundbreaking on the Minneapolis construction site is scheduled to begin in November.