#NFLInvestment #PrivateEquitySports #StadiumFunding
NFL Owners Vote to Allow Private Equity Firms to Invest in Teams
Today, the National Football League (NFL) took a significant step towards embracing private equity investments by allowing select firms to acquire up to 10% of a team's stake. This decision marks a crucial shift in the league's ownership structure, opening the door to new capital and opportunities for team owners.
The approved firms include Ares Management, Sixth Street Partners, Arctos Partners, and a consortium known as 'The Avengers,' which comprises Dynasty Equity, Blackstone, Carlyle Group, and CVC Capital Partners. These firms collectively manage assets totaling $2 trillion and plan to allocate $12 billion in capital over time, including leverage. This influx of capital is expected to facilitate funding for new stadiums and related initiatives, such as the ongoing stadium constructions for the Buffalo Bills and Tennessee Titans.
NFL Commissioner Roger Goodell expressed his belief that the 10% stake complements the current ownership framework and hinted that this percentage could be increased in the future. The league's cautious approach is in contrast to other major professional sports leagues, which permit private equity ownership stakes of up to 30%.
The valuations of NFL teams continue to rise, making it increasingly challenging for owners to invest. The recent record-setting sale of the Washington Commanders for $6.05 billion, which included a consortium led by Apollo co-founder Josh Harris and 20 other investors, highlighted the need for new investment opportunities. Harris noted that the sale process served as a 'wake-up call' for the NFL, stating that writing a $5 billion equity check is becoming increasingly difficult for individual owners.
This development is set to have a significant impact on the sports industry, with private equity firms now able to engage with a maximum of six teams each. The approved firms will have the opportunity to allocate an average of $500 million in additional capital for each team that secures an investment.
Original Article: https://www.cnbc.com/2024/08/27/nfl-private-equity-ownership-vote.html
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