The National Football League (NFL) is preparing to carve out its slice of the private equity pie, adding a new twist to the already high-stakes game of sports team ownership. After a recent vote, NFL owners have given the green light for private equity firms to own up to 10% of teams, a significant shift for a league that has long resisted outside financial interests.
But there’s a catch—a big one. The NFL, in a move that sets it apart from other major sports leagues like Major League Baseball (MLB), the National Basketball Association (NBA), and the National Hockey League (NHL), has signaled that it intends to claim a portion of the profits generated by these private equity investments. While the other leagues allow investment firms to hold larger stakes, up to 30%, none have dared to dip their hands into the lucrative “carry”—the share of profits that fund managers typically pocket.
Details remain murky, and the NFL’s approach has left some investors scratching their heads. Will this new profit-sharing model apply to all private equity firms or just a select few? And what slice of the pie does the NFL intend to take? As the dust settles from the owners’ meeting, these questions loom large.
This unprecedented move by the NFL could have far-reaching implications for the league’s future relationships with private equity. The initial list of approved firms—heavyweights like Ares Management, Sixth Street Partners, and Arctos Partners—might be eyeing this development with a mix of caution and curiosity. The consortium of investors, which includes big names like Dynasty Equity, Blackstone, Carlyle Group, CVC Capital Partners, and Ludis (founded by former NFL star Curtis Martin), may now have to factor in the NFL’s profit-sharing ambitions as they plot their next moves.
Despite the uncertainty, one thing is clear: the NFL is on a winning streak. Over the past two decades, the league’s total value has skyrocketed by 710%, dwarfing the S&P 500’s impressive but comparatively modest 660% gain. As the NFL continues to rewrite the playbook on sports finance, investors and fans alike will be watching closely to see how this new chapter unfolds.
For now, the league is keeping its cards close to its chest, declining to comment on its plans. But with billions at stake and a storied history of success, the NFL’s foray into private equity could be the next big thing—or a play that’s fumbled before it even hits the field.
(Source: Bloomberg | ESPN | Washington Post)
