The Family That Bought The 49ers In 1977 For $17 Million Are Selling A 10% Stake At An Unprecedented Valuation

The San Francisco 49ers had a down year this season, but they've been one of the more successful franchises in the NFL. They've won five Super Bowls throughout their history, which is tied for second-most of all time. More recently, the 49ers have been NFC champions twice in the past five seasons.

Since 1977, the 49ers have been majority-owned by branches of the York and DeBartolo families. Today, 45-year-old Jed York is the CEO and public face of the family ownership group. Jed's mother is Denise Debartolo York. For reasons we'll explain in a moment, Denise took over as majority owner from her brother, Eddie DeBartolo Jr., in 2000, amid the brother's legal problems.

The extended family controls 97% of the 49ers today. But that could soon change! People close to the team have said the family might be interested in selling 10% of the 49ers. At a valuation of $9 billion.

San Francisco 49ers owner Jed York shakes hands with TE George Kittle. (Michael Zagaris/San Francisco 49ers/Getty Images)

There's nothing official yet, but the family is in discussions with a potential buyer. It's not clear if it's a private equity firm or an individual (or group of people) that would put the money up on their own. Regardless, that's a hefty price tag of $900 million for a minority stake.

This latest announcement comes after a league rule change last year that allowed private equity groups to invest in small stakes with teams. That gives owners another avenue to earn some relatively quick cash while still remaining in control of their teams. Selling to private equity can also help drive up valuations, which is good for the NFL's business.

Teams quickly looked to capitalize on the private equity change. The Miami Dolphins and Buffalo Bills each sold minority stakes to private firms. The New York Giants just hired an investment bank to sell a small portion of the team. Even Jeffrey Lurie, owner of the Super Bowl-winning Philadelphia Eagles, considered selling a stake to private equity firms before going with high-net-worth individuals instead. 

None of those offers or potential offers surpassed an $8.3 billion valuation. YET. 

Purchase of the 49ers (1977)

As we mentioned earlier, since 1977 the 49ers have been owned by members of the DeBartolo/York family. Technically, ownership originates just with the DeBartolos. The Yorks married in when John York married heiress Denise Debartolo. Their son is Jed York, current team CEO.

The family fortune is traced yo Edward J. DeBartolo Sr. Eddie Sr. built a vast shopping mall empire that made him one of America's wealthiest developers. His company developed and owned shopping centers nationwide – at its peak, controlling almost one-tenth of all U.S. mall space.

By 1990 DeBartolo Sr.'s personal wealth exceeded $1.4 billion. In 1977 DeBartolo Sr. purchased the 49ers for $17 million from the family of the original owners. He immediately gifted control of the franchise to his son, Edward "Eddie" DeBartolo Jr. At just 31 years old, Eddie Jr. became the 49ers' owner, backed by his father's resources and support. Eddie Sr. died in 1994 at the age of 85. In 1996, the family's empire was acquired by the Simon Property Group in a deal that consisted mostly of Simon Property stock. FYI, today the Simon Property Group is still a publicly traded company with a market cap north of $60 billion and at least half of the company's assets can be traced to the DeBartolo family.

Dynasty under Eddie DeBartolo Jr.

Under Eddie DeBartolo Jr.'s ownership, the 49ers transformed into an NFL powerhouse. After a 2–14 season in 1978, DeBartolo Jr. made bold moves by hiring innovative coach Bill Walsh and drafting quarterback Joe Montana, moves that laid the foundation for an era of success. The team soon became a dynasty – winning five Super Bowl championships in just 14 years (1981, 1984, 1988, 1989 and 1994). During the 1980s and early 1990s, San Francisco was considered the NFL's model franchise, known for its winning culture and first-class treatment of players. The 49ers' five Super Bowl titles under DeBartolo Jr.'s tenure were a record for a single owner at the time, cementing the team's status as an NFL flagship franchise.

Eddie DeBartolo Jr.'s Legal Troubles and Ownership Transfer

Unfortunately, in the late 1990s, Eddie DeBartolo Jr. became entangled in a corruption case involving a Louisiana casino license. In 1998, he pleaded guilty to failing to report a felony during an extortion probe of former Louisiana Governor Edwin Edwards – DeBartolo had paid $400,000 to obtain a riverboat gambling license. He was fined $1 million and sentenced to probation, and the NFL fined him another $1 million and suspended him from team operations for one year.

Amid this legal turmoil, DeBartolo Jr. relinquished control of the 49ers. By 2000, he transferred his ownership stake in the team to his sister, Denise DeBartolo York, as part of a family settlement. In exchange, Eddie Jr. received a larger portion of the family's other business interests – notably an estimated $570 million in stock of Simon Property Group (the company that had merged with the DeBartolo mall holdings) along with other real estate assets. Denise DeBartolo York (with her husband John York) thus assumed ownership of the 49ers, continuing the DeBartolo family's stewardship of the franchise into the 2000s and beyond. Their son Jed became team president in 2008. He became CEO of the team organization in 2012.

Not that he had much of a choice, but trading 49ers shares for Simon Property shares back in 2000 has turned out to be not a great move for Eddie Jr. Today, Eddie's net worth is $4 billion. Thanks to the soaring value of NFL franchises, Denise's net worth before this recent 10% sale talk was $7 billion 🙂