The Dallas-based private equity firm Arctos Partners LP was reportedly one of multiple firms to meet with the NFL regarding new considerations for institutional investors’ ability to acquire team stakes.
A “handful” of firms reportedly met with the league regarding potential investments in teams as the league has begun investigating ways to incorporate institutional wealth into ownership, according to sources familiar with the meetings who spoke with Sportico.
These meetings were reportedly meant to continue discussing the possibility of private equity firms being eligible to purchase stakes in NFL teams, a practice the league had previously prohibited.
Discussions in this meeting were also expected to include an evaluation of potential policies that firms would be expected to follow if the league allowed investment, including the maximum percentage of a team that firms can own and whether the teams would be eligible to buy back stakes at a later date, per Sportico.
Including private equity in potential NFL ownership could provide incredible results for team owners, with many believing it is an inevitable shift into the league’s next ownership phase.
Irwin Kishner, co-chair of the Sports Law Group at Herrick, Feinstein LLP, has assisted the Dallas Cowboys with outside investments for over a decade and said that adding firms into the league is a “natural evolution of [the] use of private equity dollars.”
“I think, with the right mindset, the right partners, it makes a lot of sense. It provides liquidity, an ability to finance purchases, ownership, expansions, new buildings, new arenas [and] enhances the fan experience,” he said, according to The Dallas Morning News.
Every other major U.S. sports league currently allows investments by firms, with the NBA, MLB, MLS, and NWSL allowing firms to own a stake in a team worth up to 30%, per Sportico.
Sources close to the situation believe the NFL will be much stricter with guidelines presented to firms that would like to invest, though many within the league have expressed optimism that an agreement will be made soon.
NFL Commissioner Roger Goodell explained that the league has yet to make an official decision on this topic, but he is confident that the team owners “agree with the direction we’re going.”
“It’s been well thought out. The committee has worked incredibly hard, and I think they have a great appreciation for that, and as such, have great confidence in their work,” Goodell explained, per DMN.
Although the league has yet to approve or deny the potential for institutional wealth in ownership, the owners are expected to meet on August 27 to vote on a new rule allowing private equity firms to own partial stakes in NFL teams, as reported by Bleacher Report.