NFL's billionaire owners want to let private equity buy stakes in teams

Mar 27, 2023
1 year ago

A group of National Football League owners is pushing to allow private equity firms and institutional investors to buy stakes in clubs, a move that could create more bidders at a time of already skyrocketing values for professional teams.

The owners are planning to lobby for potential changes at the NFL’s annual meeting underway in Phoenix, according to several people with direct knowledge of the situation.

While new ownership rules aren’t on the NFL meeting agenda posted last week, a number of owners and their advisers will use the event — a rare moment when the most powerful league insiders congregate in one place — to persuade others that changes should be seriously considered next year, said the people. The owners and executives who spoke to Bloomberg asked not to be named discussing private information.

An NFL spokesperson said there will be no official discussion regarding ownership during the upcoming meeting. 

The NFL has some of the most restrictive rules for owning a team in global sports. The lead investor of an ownership group must have at least a 30% equity stake in the purchase, which in reality these days means billions in ready cash. No ownership group can exceed 25 people, and public companies, sovereign wealth funds and private equity investors are barred from owning shares of teams.

With rapidly escalating team values — the Washington Commanders are for sale and could fetch as much as $7 billion — any relaxation of NFL ownership rules could generate even more competition. It could also help with the league’s stated goal of diversifying its top ranks, with an expanded size of ownership groups allowing more minority investors. The 32-team league currently has no Black owners. Inc. founder Jeff Bezos, the world’s third-richest person worth $122 billion, is among those interested in bidding for the Commanders, bought by Dan Snyder in 1999 for $800 million. Billionaire Josh Harris, co-founder of Apollo Global Management Inc. who now runs his own firm, is also among the potential bidders.  

The league is increasingly dominated by some of the world’s richest people. David Tepper, owner of the Carolina Panthers, is currently worth about $15.5 billion, according to the Bloomberg Billionaires Index, while the Denver Broncos were bought last year by Rob Walton, a member of one of the world’s richest families.

While the NFL has remained a closed shop, the National Basketball Association opened its ownership to private equity firms in 2020, and late last year allowed sovereign wealth funds, pensions and endowments to acquire passive stakes in its teams. Private equity firms have since purchased stakes in teams including the Phoenix Suns and the Golden State Warriors.

Short Notice

Part of the reasoning — although never official — was to allow NBA part owners to sell their stakes to take advantage of rapidly rising valuations. In the NFL, a number of teams remain in family ownership, with stakes sometimes passed down to family members who have reasons to want to offload stakes on short notice, be it internal disputes or tax issues. Allowing private equity to invest in the NFL could help smaller owners sell out at short notice, the people added. 

Despite record prices, the NFL has no shortage of demand. The Broncos are the most recent sale, with a group led by Walton buying the team for $4.65 billion. And in a sign of some increasing diversity, Walton, the eldest son of Walmart Inc. founder Sam Walton, also brought in partners Mellody Hobson, Condoleezza Rice and Lewis Hamilton, who are Black.

The NFL isn’t against a potential rule change on ownership, but it has to balance the desire by one faction to tap new pools of capital against some of the world’s richest people who enjoy the exclusivity that comes with owning one of the teams, the people added.

Unlike in other major sports — such as the English Premier League — the NFL asks little of its owners in terms of financial transparency, and guarantees billions in revenue from TV rights without the fear of relegation to a lower league. Franchises rarely come up for sale, adding to the allure to own some of America’s most recognizable brands, and the league itself.