NFL Owners Vote To Allow Private Equity Firms To Invest In NFL Teams
NFL team owners have taken a significant step by allowing private equity funds to purchase up to a 10% stake in their franchises. This decision, reached during a recent special league meeting, marks a departure from the NFL’s long standing ownership rules and is expected to have broad implications for the league's financial landscape.
Historically, NFL ownership has been limited to individuals, families, and limited partners, with no room for institutional investors. However, with this new resolution, select private equity firms can now invest in NFL teams, though their involvement will be strictly passive—meaning they won’t have any say in team operations or decisions.
NFL Commissioner Roger Goodell emphasised that these investments are purely for providing capital to the teams, stating, "This won't change a thing... They will not be in any kind of decision-making influence in any way."
NFL to allow vetted firms to invest
The approval comes after years of consideration, with the NFL forming a special committee last year to explore changes to its ownership structure. The league has carefully vetted and approved a handful of private equity firms, including Arctos Partners, Ares Management, and a consortium featuring Blackstone and Carlyle Group, among others.
These firms are allowed to invest in up to six teams each, with a minimum investment of 3% per team and a total cap of 10% ownership per franchise.
This move is seen as a way to provide NFL teams with additional financial flexibility, especially for owners looking to sell portions of their franchises. With team valuations continuing to soar—exemplified by the recent $6.05 billion sale of the Washington Commanders—private equity could become a crucial source of capital for future transactions.
The new rule is also expected to attract a broader pool of investors, as private equity funds can provide significant financial backing without demanding control over team operations.
Investments to come with strict guidelines
Despite the potential benefits, the NFL has put in place strict guidelines to maintain the integrity of team ownership. For instance, private equity funds must hold onto their investments for at least six years before selling, preventing quick turnovers that could disrupt team stability.
Additionally, no single investor can own more than 7.5% of any fund, ensuring that ownership remains diversified and preventing any one entity from gaining too much influence.
NFL owners vote overwhelmingly in favour, but not all teams are looking to bring in private equity investments
NFL owners voted overwhelmingly in favour of the new rule, with the Cincinnati Bengals being the lone dissenting vote. Jerry Jones, owner of the Dallas Cowboys, expressed his support for the decision, calling it "a win for the game."
The league's finance committee, which played a key role in crafting the new ownership rules, has emphasised that the introduction of private equity will not undermine the existing ownership framework.
While some teams may quickly seek out private equity partners, others may take a more cautious approach. Kansas City Chiefs owner Clark Hunt noted that his team is not currently looking to bring in private equity, but he acknowledged that the option could be valuable for other franchises dealing with various financial or family-related issues.
As the NFL ventures into this new era of ownership, the league will continue to monitor and adjust its rules as needed. The special committee that oversaw the introduction of private equity will likely remain active to ensure a smooth transition and address any challenges that arise. Ultimately, the NFL hopes that this move will provide long-term financial stability for all 32 teams, allowing them to reinvest in the sport and maintain their competitive edge.
