During the NFL's annual meeting earlier this spring, several NFL owners discussed an item that wasn't on the official agenda. Those owners want the league to allow private equity firms and institutional investors to buy shares of teams. As with many ownership decisions, the move would largely be a financial one (though no owner would actually be caught saying that). By having more bidders, the value of teams will shoot beyond the record highs we've seen over the past decade.
To own an NFL team, the lead investor of a purchasing group must have at least a 30% equity share of the purchase. That's a hefty cash requirement, considering the Denver Broncos just sold to Rob Walton last year for $4.65 billion, and Dan Snyder will likely sell the Washington Commanders for north of $6 million this year. Additionally, ownership groups can't surpass 25 people, while public companies, private equity investors, and sovereign wealth funds can't own a team—at least for now.
The NFL might be relaxing its rules a bit to invite more bidders and more opportunities for investors, particularly minorities. The league currently has no Black owners at all, and allowing additional types of investors could increase diversity.
Dallas Cowboys owner Jerry Jones (Jonathan Bachman/Getty Images)
The league may also be taking a page from the NBA, which allowed private equity firms to invest starting in 2020. Already, those firms have acquired stakes in the Phoenix Suns and Golden State Warriors.
However, league owners may ultimately decide against opening up the doors to more people. Being an NFL owner means you're part of a highly exclusive club—there are only 32 teams, after all—and the majority of owners may not want to give up that status. The NFL also doesn't require teams to release much information around their financials, and the size of football stadiums plus billion-dollar TV deals mean a steady stream of revenue coming in during the season.
With those perks, the idea of relinquishing control of a part of their teams might sound crazy. Take Jerry Jones—he bought the Dallas Cowboys in 1989 for $150 million. Fifteen years later, he was a billionaire. Today, the Cowboys are worth $8 billion, the most valuable sports franchise on Earth.
NFL owners will have to decide whether they want to open up the potential floodgates of private equity firms joining their ranks. That decision may very well come down to what could be most lucrative for them. These owners are already among the richest people in the world, but if they can add billions to their net worth? That just may be worth inviting private equity into the league.
