The most valuable sports league in the world, the National Football League, has decided to let private investment firms get in on the action.
Television and licensing deals bring in billions of dollars for the NFL. The Dallas Cowboys recently became the first sports team in history to reach $10 billion in value.
NFL owners voted this week to allow private equity groups to purchase up to 10% of each NFL team. Under the agreement, the minimum stake will be set at 3% and must be held for a minimum period of six years. Equity funds will be limited to holding stakes in a maximum of six NFL teams at one time.
In a press release, the NFL said the primary motivation for the rule change was so that owners could generate a “cash infusion” for things like “stadium projects and facility upgrades.” Current NFL owners could make hundreds of millions of dollars from potential sales.
The New York Post reports on the rule change and what it means for NFL team owners and potential investors. Here’s the start of the story:
The National Football League on Tuesday approved a new rule allowing team owners to sell a piece of their franchises to private equity firms — setting the stage for a potential windfall that could drive up the value of clubs by billions of dollars.
The NFL’s 32 owners voted on the measure at a special league meeting in Eagan, Minn., and the private equity firms intend to commit $12 billion in capital, according to The Wall Street Journal.
Prior to Tuesday’s vote, the NFL was the only major North American sports league that prohibited private equity ownership in a franchise.
The NBA, NHL, Major League Baseball and Major League Soccer allow their teams to sell a maximum of 30% of equity to a fund.
Firms initially approved by the NFL will include Ares Management and Arctos Partners, in addition to a consortium comprising Blackstone, Carlyle, CVC and Dynasty Equity.
