- The NFL and its owners will meet next week to decide on allowing private equity firms to invest in its teams.
- However, it seems it has already been fated, and the meeting is simply to figure out the details of this major change.
- The NBA, NHL, Major League Baseball, Major League Soccer, and the National Women’s Soccer League have already allowed investment from private equity firms.
While NFL betting sites are ramping up their action with the season just around the corner, NFL owners are preparing for a considerable change to the way their franchises operate.
It is reported that the NFL is meeting next week in Minneapolis, Minnesota, to discuss allowing private equity firms to invest in its franchises. However, it appears that it is a done deal, and the Minneapolis meeting is just to hammer out the details of this chance, and what this will mean for the NFL’s richest owners.
The Investment of Private Equity Firms Will Change the Way The NFL Operates
This isn’t something that just popped up recently. Tom Pelissero of “The Insiders” on the NFL Network explained how private equity investment could change the league in an interview with “The Rich Eisen Show back in May 2024:
The current NFL ownership rules stated that one investor (or group) has to own at least 30% of the team, and there can’t be more than 25 people in the group. There were also no private equity firms allowed, as well as sovereign wealth funds, as there is in European soccer, and now boxing.
However, those rules could be discarded by the end of the meeting on August 27, where a vote will take place. But some, such as investor/entrepreneur Joe Pompliano, who believe that it’s a foregone conclusion that the owners will vote to allow investment from public equity firms. The league would need 24 of the 32 owners to approve these measures.
Pompliano also stated that there will be rules on how much investment can actually happen:
A 10% cap would allow investment, but those firms wouldn’t have voting rights. It’s a good investment for those firms, as the value of sports franchises have only been going up across the board. The Sportico article referenced above sows that all 32 teams have increased their value in the NFL since 2020. This ranges from the Cincinnati Bengals (just over $2 billion) to the Dallas Cowboys (north of $10 billion).
Other North American Leagues Have Been Allowing Private Equity Investment
If these changes go through, it would be at a lesser investment than other leagues. The NBA, NHL, Major League Baseball, Major League Soccer, and the National Women’s Soccer League have already allowed investment from private equity firms. However, the maximum equity those leagues allow its franchises to sell is 30%, rather than the 10% cap the NFL is looking into.
It seems that the NFL already has the firms they want to be involved. It’s led by four major firms: Ares Capital, Blackstone Partners, Carlyle Group, and CVC Partners. There is also Sixth Street, Arctos Partners, and Dynasty Equity. It appears that CVC, Blackstone, Carlyle, and Dynasty might be one large group.
It’ll be interesting to see if it leads to any issues as the NFL with an antitrust trust, stemming from the inflation of their “Sunday Ticket” package. There are also some that believe the sovereign funds rules could also go by the wayside.
