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Report: NFL considers changing ownership rules to allow institutional investors

League commissioner Roger Goodell forms new committee to evaluate ownership policies.

15 September 2023 Ed Dixon

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  • Committee consists of Atlanta Falcons, New England Patriots, Cleveland Browns, Denver Broncos and Kansas City Chiefs owners
  • Owners concerned current rules could limit growth and ability to sell stakes
  • Recommendations may be put forward in time for NFL annual meeting in March

The National Football League (NFL) has taken a major step forward to potentially allowing institutional capital into the league, with commissioner Roger Goodell forming a new committee to evaluate the competition’s ownership policies.

Sports Business Journal (SBJ) reports that the new group, which consists of five NFL owners, will hold its first meeting on 26th September and is expected to prepare any recommendations in time for all team owners to consider them at the league’s March annual meeting ‘in advance of another club sale’.

The committee will consist of the Atlanta Falcons’ Arthur Blank, the New England Patriots’ Robert Kraft, the Cleveland Browns’ Jimmy Haslam and the Denver Broncos’ Greg Penner. Kansas City Chiefs owner and finance committee chairman Clark Hunt is an ex-officio member. 

‘Following the Denver and Washington transactions, the finance committee agreed that it would be appropriate to look at the full range of ownership policies, including permitted debt levels, minimum equity requirements and holding periods, eligible categories of investors, and expanding opportunities for more diverse ownership,’ Goodell (pictured above) wrote in a memo seen by SBJ.

The move follows the July sale of the Washington Commanders to a group led by Harris Blitzer Sports & Entertainment (HBSE) founder and managing partner Josh Harris. Though the franchise fetched a record US$6.05 billion, SBJ reports many NFL executives were concerned by the failure to attract multiple serious bidders.

According to Forbes, the average NFL franchise is worth a record US$5.1 billion, up 14 per cent year-over-year (YoY), making it increasingly hard for anyone but the wealthiest individuals able to buy teams. Existing owners are said to be worried this will potentially limit growth and make it hard for them to sell limited stakes.

The newly-formed committee is reportedly set to take a serious look at multiple outcomes, including allowing limited private equity investment in teams – something already present in other US major leagues and European soccer. However, SBJ adds that the most likely short-term recommendations from the group will focus on incremental changes.

One potential option is endorsing higher debt limits from the current limit of US$1.1 billion of debt for club acquisitions. Others include raising the limit on 25 partners in any ownership group and lowering the 30 per cent threshold for principal buyers.

At present, only individuals – as opposed to companies or corporate entities – who are able to stump up the capital for at least a 30 per cent stake are able to become a principal owner of an NFL team.

Elsewhere in the NFL, the league has expanded its partnership with English top-flight soccer club Tottenham Hotspur until the end of the 2029/30 NFL season.

As part of the agreement, the Tottenham Hotspur Stadium will be given official status as the home of the NFL in the UK. 

The latest deal will see a minimum of two regular season NFL games a year continue to be played at the stadium, with 12 of the league’s 32 teams having already travelled to the venue. Two games are set to be played there during the 2023 NFL London Games in October.

SportsPro says…

The NFL has sat and watched other US major leagues go down the institutional investment route. Notably, the National Basketball Association (NBA) allows sovereign wealth funds to become minority owners in teams, though commissioner Adam Silver has said there are no immediate plans for them to take controlling stakes. Major League Baseball (MLB), Major League Soccer (MLS) and the National Hockey League (NHL) also permit investment funds to take stakes.

Goodell has faced growing calls to allow private equity firms and institutional investors into the NFL, with Bloomberg reporting in March a group of owners were planning to lobby for a shakeup.

Even so, changes would not necessarily clear the way for private equity investment. According to SBJ, the NFL could end up focusing on entities that are, in practice, the embodiment of individuals but cannot currently buy into teams. Pension funds, public companies and sovereign wealth funds could also be considered.

It is difficult to argue that the NFL is in urgent need of further investment. The Commanders sale is testament to franchises’ lofty valuations and the league’s domestic broadcast agreements until 2033 are worth more than US$100 billion.

Yet, owners feel the existing ownership policies need to be retooled to ensure further growth. If they get their way, the NFL can command even more eyewatering sums.

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