Source: AFP
The owners of the National Football League (NFL) voted on Tuesday to invest in private equity in a landmark move that could lead to billions of dollars in new funding for the sport, the US-based league confirmed.
At a meeting in Milwaukee, owners of the NFL’s 32 teams gave the green light to a plan that would allow a select group of private equity firms to buy up to 10 percent of a team’s stock.
Tuesday’s vote represents a major departure for how NFL teams are funded. Historically, franchises have operated as family businesses or are owned by wealthy individuals.
The move to allow private equity investment puts potentially billions of dollars of new cash on the table to help pay for new stadiums and other projects for the most popular sport in the United States.
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According to NFL documents outlining the parameters of the new financing deal, private equity firms can now buy up to 10 percent of the stock in a team and must hold that investment for at least six years.
The NFL has approved three private equity firms, Arctos Partners, Ares Management and Sixth Street, as well as a consortium consisting of Blackstone, Carlyle, CVC, Dynasty Equity and Ludis, as the firms allowed to invest in the NFL.
The decision brings the NFL into line with other US professional sports leagues, as well as some of the world’s most iconic football teams.
Major League Baseball, the National Basketball Association and the National Hockey League allow up to 30% of teams to be owned by investment companies.
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Sixth Street has already invested in Spanish giants Real Madrid’s new stadium and also has a stake in the NBA’s Golden State Warriors.
Another of the NFL’s approved investors, Dynasty Equity, owns a stake in English soccer giants Liverpool.
But while the change in the NFL’s funding structure marks a departure from the past, U.S. reports said the NFL would not allow sovereign wealth funds — such as Saudi Arabia’s roughly $925 million Public Investment Fund — to invest in his groups.
NFL commissioner Roger Goodell signaled in July that the league was ready to embrace private equity investment.
“As sports evolve, we want to make sure our policies reflect that,” Goodell told CNBC.
“We had huge interest [from private equity firms]and we think that could make sense for us in a limited way, probably no more than 10 percent of a group. That would be something that we think could complement our property and support our property policies.”
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NFL teams are some of the most valuable sports franchises in the world, with the Dallas Cowboys worth an estimated $10 billion, according to sports news website Sportico.
The value of NFL teams reflects the league’s dominance of the US sports landscape, where it remains by far the most-watched professional league in the United States.
In 2021, the league signed a staggering $110 billion media rights deal spanning 11 years — nearly double the value of its previous media deal.
According to Statista, 93 of the 100 most watched US telecasts in 2023 were NFL games.
Source: AFP
