The National Football League has made big changes to its ownership rules. Now, private equity groups can invest in teams, which allows them to join the most profitable sports league in the US for the first time.
NFL owners have given the green light to these changes, which let team owners sell parts of their teams to private equity firms. Some investment firms like Ares Management, Arctos Partners, Sixth Street, and a group including Blackstone, Carlyle, CVC, Dynasty Equity, and Ludis – run by retired NFL player Curtis Martin – are preferred buyers for owners looking to sell.
Private equity firms can now buy up to 10% of a team’s common equity, up to a $2 billion commitment, possibly totaling $12 billion across the league. They must hold these stakes for at least six years and are limited to investing in six teams.
The NFL wants to open the door for team owners to cash out as franchise values skyrocket, attracting Wall Street to the league. Walmart chair Greg Penner, an owner of the Denver Broncos, said the decision received strong support from team owners.
The NFL is the last major sports organization in the US to allow institutional investment. The chosen investment firms, like Ares and Arctos, are key players in sports investments.
Investors see US football as a lucrative opportunity due to its valuable media rights and revenue-sharing agreements. With franchise values rising, it’s becoming harder for billionaires to cover the costs, so the NFL is changing its rules to make it easier to raise capital and sell stakes.
While the NFL is opening up to institutional investments, their ownership rules are still stricter than other sports leagues. Private equity firms in leagues like European football have taken control of teams, highlighting the changing landscape of sports ownership.
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