The NFL on Aug. 27 changed the rules on team ownership, allowing a list of private equity firms to own a piece of a club, making the league the last in American professional sports to permit private equity investment in its teams.
The NFL’s special committee on ownership policy—formed in 2023 by NFL Commissioner Roger Goodell—approved the change at a meeting outside Minneapolis, Minnesota. The group includes Atlanta Falcons owner Arthur Blank, Cleveland Browns Jimmy Haslam, New England Patriots owner Robert Kraft, Denver Broncos co-owner and CEO Greg Penner, and Kansas City Chiefs owner Clark Hunt.
The move will allow people to invest in teams without giving funds directly to the seller. Hence, they will be able to invest in the firm that owns the team. Until the rule change, ownership consisted of only people.
For example, the Washington Commanders are under an ownership group led by billionaire businessman Josh Harris. However, the group was a collective of people—including NBA legend Magic Johnson and venture capitalist Mark Ein—who are not part of any firm. Some teams, like the Carolina Panthers, have just one owner, while others have majority and minority owners.
Under the new rule, teams can have up to 10 percent of their ownership consist of private equity firms. For these firms to invest, they must own at least 3 percent of the team. They must hold their ownership stake for at least six years.
Additionally, the firms must invest at least $2 billion for an ownership stake. An investor in a fund cannot have a share of more than 7.5 percent, and the fund cannot have more than 20 percent of its funds invested in a single team.
Sovereign wealth funds, like those of Saudi Arabia, will be ineligible under the new rule.
Private equity firms can invest in a maximum of six teams.
One of the four private equity firms that will be allowed to have a non-controlling interest in NFL teams is Arctos.
“We are honored to be among the first private investment firms being considered by the National Football League as potential partners for their clubs and owners,” it said in a statement.
The private investment firm said it would be the only one “approved to invest in equity across each of the five most popular major North American leagues.” It did not say which team or teams it is interested in investing in.
The other three private equity entities eligible to have an ownership stake in any team are Sixth Street Partners, Ares Management, and a consortium that includes Carlyle Group, Blackstone Partners, Ludis Capital, Dynasty Equity, and CVC Capital Partners.
“We are pleased to have secured this provisional approval following the NFL’s thoughtful and robust process, and welcome the potential opportunity to partner with the league,” said the consortium in a statement to The Epoch Times.
Sixth Street Partners and Ares Management did not respond to a request for comment.
At a press conference following the vote, Goodell called the move “an appropriate thing to give teams that liquidity and to reinvest in the game, into their teams.”
Goodell predicted that not all teams will accept private equity ownership.
The Dallas Cowboys are the most valuable NFL franchise at $9 billion, according to Forbes. The 2023 sale of the Commanders by Dan Snyder to the group led by Harris was the most expensive in NFL history at $6.05 billion.
Private equity firms have stakes in teams in other sports leagues ranging from college to soccer, the latter of which consists of some sovereign-wealth funds. For example, the Manchester City soccer team is mostly owned by an entity tied to a sovereign wealth fund owned by United Arab Emirates Vice President and Deputy Prime Minister Mansour bin Zayed Al Nahyan.
Private equity firms can own up to 15 percent of an MLB team, while they can own up to 20 percent of NHL, NBA, MLS, and NWSL teams. All of those leagues allow teams to allocate 30 percent of their ownership to private equity firms.
