The talk of the NFL allowing private equity ownership of franchises has been heating up for the past year or so, particularly during the sale of the Washington Commanders in 2023. In an interview with CNBC at the annual Sun Valley conference, which welcomes many of the world’s wealthiest and most influential people, NFL Commissioner Roger Goodell discussed private equity entering ownership ranks.
Goodell mentioned the “tremendous amount” of interest in private equity, adding that the league believes it could make sense for them in a “limited fashion.” The Commissioner noted that they probably would not allow a private equity firm to own more than ten percent of a team.
- So, despite immense interest, private equity is set to be a relatively small part of NFL ownership in terms of percentage owned.
- Still, the valuations of NFL franchises continue to rise and is an incredibly safe investment, making it appealing for private equity groups.
- While Goodell mentioned limiting PE ownership to ten percent, numbers like 30 percent were previously speculated. It might naturally become a gradual rise, starting at ten percent and eventually moving closer to a third of a team owned by private equity.
The NFL is essentially the lone holdout in the world of sports when it comes to allowing private equity ownership. Private equity, pension funds, and sovereign wealth funds are all prohibited from having ownership stakes at a time when many leagues are embracing those types of investments. That said, the NFL is a different animal as America’s most popular sport by far.
However, getting private equity money in the mix will almost certainly lead to even bigger increases in franchise valuations. Also, private equity can help inject cash into organizations to embark on projects like stadium renovations.
There’s also the matter of creating more serious bidding parties in the rare franchise sales that occur. As we saw last year during the Commanders sale, there simply weren’t many interested potential owners that were liquid enough to make the purchase easily.
Private equity is coming, which will open the pool of plenty of interested groups getting into the mix as part NFL owners.