NFL to Approve Private Equity Stake Purchases: What It Means for Team Ownership

NFL owners are poised to vote on a significant policy shift that would permit private-equity firms to acquire up to 10% stakes in NFL teams. This change, anticipated to be approved in a Tuesday meeting, marks a departure from the league’s longstanding restriction against institutional investors, which required team owners to be individuals rather than firms.

Under the new policy, ownership stakes would be available to three pre-approved private-equity firms: Arctos, known for its investments in Major League Baseball, the National Basketball Association, National Hockey League, and major European soccer clubs; Ares Management; and Sixth Street. Additionally, a consortium including Carlyle Group, Blackstone, CVC Capital Partners, and Dynasty Equity will also be authorized to buy into NFL teams.

This policy shift comes amidst soaring franchise valuations. The sale of the Washington Commanders for a record $6 billion in 2023 exemplifies the escalating worth of NFL teams. For context, Dan Snyder acquired the team in 1999 for $800 million, setting a record at that time.

To secure their stake in the NFL, private-equity firms have agreed to specific conditions. These include no preferred-equity stakes, no governance rights, and a commitment to hold their investments for a minimum of six years—terms that diverge from standard private-equity practices.

Each approved firm can purchase up to 10% of six different teams. However, with 32 teams in the league, this initial allocation may not cover all franchises, potentially leading to future expansions of the policy. Notably, the NFL’s limits are more conservative compared to the NBA’s 30% cap for institutional investors and European soccer clubs, which often have no upper limit. Additionally, the league has ruled out investments from sovereign-wealth funds, such as Saudi Arabia’s Public Investment Fund, which owns Newcastle United in the Premier League.