Scott W. Grau/Icon Sportswire via Getty Images
Private equity firms could be moving into NFL franchise ownership in the near future.
NFL Network’s Ian Rapoport reported Tuesday that the league’s owners approved a measure that will allow private equity firms to obtain part ownership of clubs. Rapoport also shared some of the details:
Ian Rapoport @RapSheet
NFL owners approve a measure to allow part-ownership of clubs by private equity firms. Details: pic.twitter.com/plUKrkk4OC
Judy Battista of NFL.com noted there are a number of rules in place when it comes to teams selling stakes to private equity firms.
Perhaps most notably, only 10 percent of any team can be owned by private equity funds. Multiple funds can be a part of that ownership slice, but it cannot exceed more than 10 percent total.
Sovereign wealth funds and pension funds are also not allowed to be direct investors.
The NFL still requires the controlling owner of each team to own at least 30 percent of the club. What’s more, no team can have more than 25 total owners.
In essence, that means any private equity funds would be taking a passive role at best without any voting power. They also won’t be making important personnel decisions.
ESPN’s Michael Rothstein called Tuesday’s approval a “culmination of almost a year’s worth of work for a special committee” that NFL commissioner Roger Goodell put together. The committee consisted of Atlanta Falcons owner Arthur Blank, New England Patriots owner Robert Kraft, Cleveland Browns owner Jimmy Haslam, Denver Broncos CEO Greg Penner and Kansas City Chiefs owner Clark Hunt.
The NFL is the last major American sports league to allow private equity funds to become involved in ownership. As Rothstein explained, the NBA, MLS, NWSL, NHL and MLB all allow up to 30 percent of teams to be owned by such funds, so the NFL’s approach is more conservative in nature.
Eric Fisher of Front Office Sports called Tuesday’s vote an outcome that “has been increasingly a foregone conclusion.”
Basically, it expands the list of potential buyers whenever a team is put up for sale, which is increasingly needed as the league continues to soar in popularity with increasing team values. The Washington Commanders sold for $6.05 billion last year, and Fisher suggested that is “a figure that could soon look quaintly small amid the league’s continued growth.”
Owners who receive an infusion of cash from private equity funds for 10 percent of their club can also use the additional money for projects such as stadium renovations and other team-related expenses.
