NFL to vote to allow private equity to own teams
As private capital has infiltrated every aspect of the American economy, one very popular and profitable sector has resisted it: professional football. But that could change Tuesday, when NFL owners are scheduled to vote on whether to change the league’s ownership rules. allow private equity investment into teams.
All 32 NFL owners gathered in Minneapolis to vote on the issue. The rule changes would be passed if 24 teams vote to approve the measure.
Allowing private equity investment in teams would be an NFL first allow The organization’s capital is invested in its franchises. Until now, teams have been owned by wealthy individuals or, at most, a consortium of investors who put in their personal money. The league has long been defined by its legendary, great team owners. Among the most famous are people like Dallas Cowboys owner Jerry Jones or New England Patriots owner Robert Kraft.
The rule changes could be in the works for more than a year. In September 2023, the NFL form a committee to explore revamping its ownership policy. The decision to form the committee comes after two huge sales: the Denver Broncos Walmart heir Rob Walton for $4.65 billion and the Washington Commanders Apollo Global Management co-founder Josh Harris said $6.05. (Harris invested his own money, not Apollo’s.)
The NFL has previously be considered a vote on the issue in May, but ultimately selected postponed. After that May meeting, NFL commissioner Roger Goodell appeared optimistic that the changes would be approved, telling the press that team owners “agree with the direction that we’re going, some of the aspects that we presented to them in that update.”
The NFL is the only one of the four major US sports leagues that does not allow any institutional investment. The NBA, NHL and MLB all allow teams to sell up to 30% to such investors. In overseas sports, especially European soccer, institutional investment is much more common.
Even the NFL’s new ownership rules, if approved on Tuesday, would be more restrictive than other leagues. The NFL would likely only allow the sale of 10% of a team to a select group of investors approved by the league, according to the report. The Wall Street Journal.
As of June, the NFL had identified seven private equity firms it believed would be suitable for investment, according to to Sportico. Six of the seven companies—Ares Capital, Carlyle Group CVC Partners, Sixth Street Arctos Partners and Dynasty Equity—all have varying degrees of expertise in sports investing. Slat is the only one of the NFL’s pre-selected firms without prior sports investments, but it has about $1 trillion in assets under management. Each firm can invest in up to six different teams. The NFL will not allow sovereign wealth funds to invest in teams, as is the case with other sports leagues.
Sixth Street, Arctos and Dynasty Equity in particular have made a name for themselves as experts in the sports business. Sixth Street have invested at the new stadium of Spanish football team Real Madrid, Arctos own a minority stake in the NBA’s Golden State Warriors and Dynasty Equity buy stake in the English football team Liverpool Football Club, owned by Fenway Sports Group, John Henry’s company, which also owns the Boston Red Sox.
NFL franchises are among the most valuable assets in sports, making them both coveted and absurdly expensive. Loosening ownership rules would allow more investors to get involved in owning a team, while also providing current owners with liquidity if they want or need it. The NFL’s skyrocketing valuation comes from the league’s massive media rights deals, estimated to be worth around $110 billion over 10 years. As the most popular sport in America, football and the NFL also play a special role in the country’s culture. That has also translated into success in the marketplace, where by 2023 93 out of 100 American television broadcasts NFL games.
The Dallas Cowboys are the most valuable sports team in the world, valued at around $10 billion by 2024, according to ARRIVE Sport. The second most valuable sports franchise is the mighty New York Yankees baseball team, worth about $7.1 billion, according to ARRIVE Forbes Magazine. The NBA’s most valuable team, the Golden State Warriors, is valued at a similar amount. While in European football, Real Madrid, the legendary Spanish team, is the continent’s most valuable team, valued at $6.1 billion.
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