NFL owners push to allow private equity investments in clubs. What does it mean for the game?

A group of NFL team owners is seeking to open up the league to private equity firms and institutional investors to purchase stakes in teams, according to sources with direct knowledge of the situation. The owners plan to lobby for changes at the NFL's annual meeting in Phoenix, where the league's most powerful insiders congregate, to create more bidders and allow for more diverse ownership groups. Currently, the NFL has some of the most restrictive rules for team ownership in global sports, including limiting ownership groups to 25 people and barring public companies, sovereign wealth funds, and private equity investors from owning shares of teams.

Any relaxation of NFL ownership rules could attract even more competition, especially given skyrocketing values for professional teams. The Washington Commanders, for instance, are up for sale and could fetch up to $7 billion. Furthermore, diversifying ownership groups could provide opportunities for more minority investors. At present, the 32-team league does not have any Black owners.

Amazon. com founder Jeff Bezos, worth $122 billion, is among those interested in bidding for the Commanders. Billionaire Josh Harris, who co-founded Apollo Global Management and now runs his own firm, is also a potential bidder. The NFL is increasingly being dominated by some of the world's richest individuals, including David Tepper, owner of the Carolina Panthers, and Rob Walton, who bought the Denver Broncos last year.

While the NFL has remained a closed shop, the National Basketball Association opened its ownership to private equity firms in 2020 and last year allowed sovereign wealth funds, pensions, and endowments to acquire passive stakes in its teams. Private equity firms have since purchased stakes in teams like the Phoenix Suns and the Golden State Warriors.

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While the NFL has no shortage of demand and its franchises rarely come up for sale, the proposed rule change could help smaller owners sell out at short notice. However, the NFL has to balance the desire to tap new pools of capital with some of the world's richest people who enjoy the exclusivity that comes with owning one of the teams.

Unlike in other major sports, such as the English Premier League, the NFL asks little of its owners in terms of financial transparency and guarantees billions in revenue from TV rights without the fear of relegation to a lower league.

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