On Tuesday afternoon, NFL owners voted to approve a groundbreaking change to the league’s ownership structure, allowing private equity funds to purchase stakes in NFL teams. This marks a significant departure from the league’s traditional rules, which previously permitted limited partners but not institutional investors. The new measure will enable owners to sell small portions of their teams, granting private equity funds access to potentially hundreds of millions of dollars in capital.
While this move offers a substantial financial benefit for NFL owners, it is unlikely to cause any immediate changes to the way franchises are run. Private equity funds are restricted to owning no more than 10 percent of a team and will have no voting rights or influence over day-to-day operations. This means that fans are unlikely to notice any difference in the team’s management or decision-making, such as player selection. The primary purpose of the new rule is to provide liquidity for team owners, allowing them to invest in their franchises without ceding control to outside investors.
The NFL had been considering the possibility of allowing private equity investments for several years, and in the past year, it became a more serious topic of discussion. A special committee was formed to examine the issue, ultimately leading to the approval of the measure. The NFL has carefully vetted a small group of private equity firms—such as Arctos Partners, Ares Management, and Blackstone—that will be allowed to invest in teams. These firms will be permitted to buy stakes of at least 3 percent, with the total investment not exceeding 10 percent of any single franchise.
The structure of these investments ensures that private equity funds remain passive investors. They will not have voting power, and the controlling owner of each team must still maintain at least a 30 percent stake. The NFL’s strict ownership rules also limit the number of total owners, including the private equity funds, to no more than 25 individuals or entities per team. Furthermore, private equity investors must hold their stakes for a minimum of six years before selling, preventing speculative flipping of shares.
The motivation behind this change is largely financial. Even wealthy team owners may require additional liquidity for stadium projects or other expenses, and selling a small portion of their team to private equity funds provides a way to raise capital. Additionally, as team values continue to rise, particularly with recent high-profile sales like the Washington Commanders, the presence of private equity investors will help expand the pool of potential buyers. This makes it easier to secure financing for large transactions, particularly when individual billionaires are less common.
Looking ahead, the approval of private equity investments could lead to immediate interest from current owners. The rule change goes into effect immediately, and some teams may soon begin seeking investment from the vetted private equity funds. This could be especially appealing for family-owned teams that may require extra capital for long-term planning or development. As the market for NFL teams continues to grow, private equity funds will likely play a pivotal role in future team sales, ensuring a broader and more competitive bidding process.
