By: Thomas Oatridge

Media Reports and Conflicting Narratives About a Seahawks Sale

Just days before Super Bowl LX between the Seattle Seahawks and the New England Patriots was set to kick off, it was announced that the Seattle franchise would be back on the market after nearly three decades, a deal that is estimated to close for around $7 to $8 billion. Paul Allen, the Seattle Seahawks’ longtime owner and a co-founder of Microsoft, passed away in 2018. Prior to his death, Allen established a trust encompassing most of his assets and appointed his sister, Jody Allen, to be the personal representative of the estate and trustee to oversee the eventual sale of the trust’s assets, including the Seattle Seahawks. Although it is widely understood that the trust documents do not impose a specific timeline for selling the team, ESPN reported that the franchise would soon be put on the market. The Paul G. Allen Trust promptly issued a statement dismissing the report as rumor and stating unequivocally that “the team is not for sale.” Adding to the speculation, the Wall Street Journal reported that the NFL issued the Seahawks a $5 million fine for being out of compliance with ownership requirements. However, NFL Commissioner Roger Goodell denied such allegations shortly after these reports surfaced.

Days after this initial story broke, Yahoo Sports released an article outlining the confusion, while simultaneously creating more confusion by reporting contradictory statements about Washington State trust and estate law. The article opens by asserting the estate mandates that the Seahawks will “eventually” be sold. The article subsequently quotes a local Seattle sportswriter who claims that “when the estate comes around and says, ‘you got to sell the team,’ she has to sell the team,” because “her job is to carry out the will of the estate.” Yet, as the same article reports, just moments earlier, the estate’s governing documents never set a specific timeline for selling its assets. The week leading up to the Super Bowl has underscored the need to ask more precise legal questions, rather than accepting the latest rumor as a statement of law.

The Legal Pressure Point: NFL Ownership Rules

To frame our legal analysis and fairly characterize Yahoo Sports’ interpretation, it’s important to point out the key legal risk the Paul G. Allen Trust assumes by deferring the sale of the Seahawks. The National Football League’s bylaws are clear and unambiguous regarding ownership structure, mandating the majority stakeholder must be an individual, rather than a trust. Additionally, all controlling owners must maintain a 30% ownership stake in their respective team. It is possible that this contractual obligation to the league will trigger a sale of the team earlier than what the trustee of the Paul G. Allen Trust, Jody Allen, would have otherwise preferred. The aforementioned stories by ESPN and the Wall Street Journal may in fact be pointing to this as the likely outcome, especially given the recent announcement that the estate agreed to sell the Trail Blazers to the majority stakeholder of the Carolina Hurricanes for $4 billion.

Does Washington State Law Require an Immediate Sale?

Contractual obligations to the NFL are only part of the legal picture. In accordance with Paul Allen’s will, his sister Jody was assigned as personal representative to properly probate his estate. She was also given the role of trustee to the Paul G. Allen Trust. Therefore, trust and estate law must be considered to properly understand this situation. Under the Revised Code of Washington (RCW), a trust is created by the transfer of property to a trustee to carry out the terms of the trust. Personal representatives and trustees must fulfill functionally identical fiduciary duties such as administering the trust solely in the interests of the beneficiaries, keeping the beneficiaries reasonably informed, managing assets properly, and avoiding self-dealing for personal benefit. In a 2022 interview, Jody Allen indicated the estate could take 10–20 years to unwind due to its complexity and size. Thus, if there is no reason to doubt the validity of this claim and no established deadline for the sale of the trust’s assets, it is hard to say what would trigger a breach of fiduciary duty to the trust if the Seahawks are not sold within the NFL’s preferred timeline. Furthermore, given Jody Allen is both the personal representative of the estate and the trustee of the Paul G. Allen Trust, it is unlikely the estate will “come knocking” to force Jody to sell the team either.

When a Sale Could Become Legally Problematic Under Washington State Law

There is, however, a scenario where Jody Allen could be found in breach of her fiduciary duty as personal representative of the estate and trustee. According to Yahoo Sports, their source discussed a rumor of “Allen and a bunch of her affluent friends at Seattle-based companies Microsoft and Amazon coming in and buying the team from her brother’s trust.” If this rumor turns out to be true, Jody could open herself up to the risk of breaching her fiduciary duties through self-dealing. This occurs when a trustee enters into a sale, encumbrance, or other transaction involving the investment or management of trust property for the trustee’s own personal account or which is otherwise affected by a conflict between the trustee’s fiduciary and personal interests. In 2018, a Washington State appeals court affirmed a lower court’s decision to block the sale of estate assets by a personal representative to himself because it breached his fiduciary duties via self-dealing. However, if Jody Allen decides to move forward with the sale of the Seahawks to herself, Washington State law allows for three exceptions to this doctrine which include waiver by the trust instrument, waiver by the beneficiaries, or permission from the court.

Conclusion

At present, there is no indication that Jody Allen or the Paul G. Allen Trust are under any immediate legal obligation to sell the Seattle Seahawks. If a sale occurs in the near term, it is more likely to stem from contractual obligations to the NFL rather than any requirement imposed by Washington State law. Absent meaningful pressure from the NFL, the timing of any sale remains largely within the discretion of Jody Allen as trustee of the Paul G. Allen Trust.

#Seahawks #JodyAllen #TrustAndEstateLaw #WJLTA