While private equity is making inroads into every area of the American economy, there’s one extremely popular and lucrative sector that’s resisting it: skilled football. But that would change Tuesday, when NFL owners plan to vote on whether to vary the league’s ownership rules to permit private equity investment within the teams.
All 32 NFL owners are gathered in Minneapolis to vote on the matter. The rule changes will likely be approved if 24 teams vote to ratify the measure.
Allowing private equity investment in teams could be the primary time that the NFL allowed to speculate institutional capital in its franchises. Until now, the teams were owned by wealthy individuals or, at most, a consortium of investors who contributed their very own money. The league has long been shaped by legendary, larger-than-life team owners. Among essentially the most famous are Jerry Jones, the owner of the Dallas Cowboys, and Robert Kraft, who owns the New England Patriots.
The possible rule changes have been within the works for over a 12 months. In September 2023, the NFL put together a committee to review the revision of ownership policy. The decision to form the committee was made after two mammoth sales: the Denver Broncos to Walmart heir Rob Walton for 4.65 billion US dollars and the Washington Commanders to Apollo Global Management co-founder Josh Harris for $6.05. (Harris invested his own money, not Apollo’s).
The NFL had already considered a vote on this issue in May, but ultimately decided for After the May meeting, NFL Commissioner Roger Goodell sounded optimistic that the changes could be adopted, telling the press that team owners “are OK with the direction we’re going, with some of the aspects that we’ve presented to them in this update.”
The NFL is the one one in all the 4 major US sports leagues that doesn’t allow institutional investment. The NBA, NHL and MLB allow their teams to sell as much as 30% of their shares to such investors. In foreign sports, particularly European soccer, institutional investment is much more common.
Even the NFL’s latest ownership rules, if passed Tuesday, could be more restrictive than those of 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, in line with the Wall Street Journal.
By June, the NFL had identified seven private equity firms it believed could be suitable for investment. after to Sportico. Six of the seven firms – Ares Capital, Carlyle Group CVC Partners, Sixth Street Arctos Partners and Dynasty Equity – all have various levels of experience investing in sports. Blackstone is the one one in all the firms chosen by the NFL that has not already invested in sports, but manages assets valued at around $1 trillion. Each firm could spend money on as much as six different teams. The NFL doesn’t allow sovereign wealth funds to speculate in teams, as other sports leagues do.
Sixth Street, Arctos and Dynasty Equity specifically have made a reputation for themselves as specialists within the sports business. Sixth Street invested in the brand new stadium of the Spanish football club Real Madrid, Arctos owns a minority stake within the NBA’s Golden State Warriors and Dynasty Equity bought a stake within the English football team Liverpool Football Club, which is owned by the Fenway Sports Group, the corporate owned by John Henry, which also owns the Boston Red Sox.
NFL franchises are amongst essentially the most highly valued assets in sports, making them each highly wanted and prohibitively expensive. Relaxing ownership rules would allow a greater variety of investors to take part in the ownership of a team, while also providing liquidity to existing owners should they need or need it. The NFL’s rising valuation is because of the league’s massive media rights deals, estimated to be price around $110 billion over 10 years. As the most well-liked sport in America, football and the NFL also play a unprecedented role within the country’s culture. This too has translated into success available in the market, where in 2023 93 of the highest 100 NFL games were broadcast on US television.
The Dallas Cowboys are the most precious sports team on this planet and will likely be price around $10 billion in 2024. after To SportyThe second most precious sports franchise is the baseball stronghold New York Yankees, valued at around $7.1 billion. after To Forbes. The NBA’s most precious franchise, the Golden State Warriors, was valued at concerning the same amount. And in European soccer, Real Madrid, the legendary Spanish team, is the continent’s most precious, valued at $6.1 billion.
In our latest special edition, a Wall Street legend gets a radical makeover, a tale of crypto injustice, misbehaving poultry kings, and more. Read the stories.
