From the archives: Johnson & Johnson heir to buy Jets for $635M

This story was originally published in Newsday on January 12, 2000

In a watershed deal that signals the beginning of another era for the New York Jets, Robert Wood Johnson IV, the great-grandson of one of the three founders of Johnson & Johnson, yesterday agreed to buy the team for $ 635 million, the highest price ever paid for a U.S. sports franchise without a stadium included.

Johnson's winning bid-the only one that the estate of the late Leon Hess submitted to the NFL yesterday for approval-also ends Cablevision chairman Charles Dolan's pursuit of the team, which was put up for sale when Hess died at age 85 in May.

The 53-year-old Johnson, who quietly oversees his family's extensive philanthropic interests, seemed quite exuberant yesterday, colleagues said, and promised to take command quickly.

"I do intend to have preliminary conversations with both Jets president Steve Gutman and Bill Parcells at the earliest possible moment," Johnson said in a statement. "We hope that we can be successful in fulfilling Mr. Hess' dream of developing the New York Jets into a championship team.

"In that regard, we want to emphasize that we are totally dedicated to bringing a winning and championship team to this area. We understand and appreciate the difficulties inherent in that goal, but we look forward to working with Steve Gutman and Bill Parcells in developing a first-class organization, which is a cornerstone in developing a winning franchise."

Parcells, who stepped down as coach Jan. 3, remains in charge of all of the team's on-the-field decisions. He has been urged by players and fans to return as coach for one more season. He issued a one-line comment: "I am looking forward to meeting Mr. Johnson."

After a two-hour meeting with John Hess-Leon Hess' son, the chairman of Amerada Hess and chief executor of the estate-the NFL's eight-member finance committee voted unanimously to recommend Johnson to the full ownership. All 31 teams are expected to vote on the sale Tuesday in a meeting at the Waldorf-Astoria in Manhattan. Twenty-four votes are necessary for approval, and smooth sailing is expected.

"He is an outstanding guy and I'm sure he will be approved by the league," said Nicholas Brady, a former Treasury secretary and one of the five executors.

Dolan echoed that sentiment. "While I am personally disappointed, I have enjoyed working with the Hess family throughout this process and hold them in the highest regard," he said in a statement. "My primary motivation in seeking the Jets was to field a team that would compete for a championship and make Jets fans proud. I congratulate Woody Johnson and his wife, Sale, who I know share that goal. Woody will be an outstanding owner, and I will be rooting for him and the team."

Dolan previously failed in efforts to acquire the Yankees, Washington Redskins and Cleveland Browns.

The hefty price paid for the Jets may prompt Johnson to seek ways to share the cost. Only the Washington Redskins, sold for $ 800 million last year, and the new Houston NFL franchise, acquired for $ 700 million, had larger price tags.

But it was unclear yesterday whether Johnson would sell minority interests in the franchise. Charles Wang, the chairman and chief executive of Islandia- based Computer Associates, has reportedly discussed the matter with Johnson. Wang could not be reached for comment yesterday.

Meanwhile, there are pressing football issues. A day after Parcells stepped down as coach last week, his hand-picked successor, Bill Belichick, turned down the job, leaving the team in limbo. The league is conducting a grievance hearing tomorrow on Belichick's contract status.

Since the summer, Dolan, 73, had been considered the front-runner to land the team, with his last bid reportedly close to $ 625 million. But in December, as the race narrowed to the two suitors, Johnson increased his bid of slightly less than $ 600 million by almost $ 40 million, sources said.

But the Hess trustees were undecided as late as early yesterday. "The result wasn't clear until this morning," said a person familiar with the process.

"Dolan was contacted after the conclusion of the meeting and told of the finance committee's vote. It wasn't a function of whether or not Dolan was allowed to raise his bid today. It was an orderly process. The issue was that Hess' will stipulated that arrangements were made to ensure that the highest bidder would get the team."

The price initially was anticipated to reach about $ 500 million, but Goldman, Sachs & Co., which was handling the sale for the estate, successfully negotiated the bids upward. Additionally, some NFL-team owners were wary of Dolan's growing clout in media and sports properties. Cablevision controls Madison Square Garden, the New York Rangers and Knicks, and the MSG Network.

Until Johnson is formally approved as the new owner, John Hess and Gutman will continue to run the team. But Gutman, a Hess loyalist who will receive $ 5.1 million as part of the transaction, eventually may leave his post.

"The late Leon Hess was the proud owner of the Jets since 1963," the Hess trustees said in a statement. "He had a special love for the team and its many loyal fans. The Hess family will remain strong supporters of the Jets and wish Mr. Johnson, Bill Parcells and the entire Jets organization and players every success in the future."

For the players, the page has not fully turned. "It's really kind of waiting more toward the coaching issue now," said Jets defensive end Rick Lyle. " You're just kind of waiting out the storm at this point because anything can happen. "

Among Johnson's other aims is to secure a new stadium in order to increase revenues, sports-business experts said. Most successful NFL teams need the cash flow from luxury boxes, premium seating, and naming rights to turn a significant profit. The Jets' lease at Giants Stadium ends in 2008.

For Dolan, his attention likely will return to acquiring the Mets. Negotiations with co-owners Fred Wilpon and Nelson Doubleday have been on the back burner since the spring. But sources say the talks can be revived and that a $ 400-million deal for about 80 percent of the team is on the table.

Pointing out that corporate and cross-ownership is less of an issue in major league baseball, Marc Ganis of SportsCorp Ltd., a Chicago-based consulting firm, said yesterday, "I absolutely think he has a shot at another team."

A Cablevision spokesman declined to comment.