Private Equity Firms to Commit $12 Billion for NFL Team Stakes After League Vote

As the price of franchises soar, shrinking the pool of would-be acquirers, NFL owners have reconsidered their aversion to private equity. 

Thirty-one of the 32 franchise owners voted at a special meeting Tuesday to allow a select group of PE firms to join their ranks as minority investors. At these prices, who else is going to buy the Cleveland Browns or New York Jets?

Running Back Carried Interest

The NFL’s exclusive group of owners has been more reluctant to let in PE than its league counterparts: The NBA, NHL, and MLB all allow PE firms to buy team stakes up to 30%.

But the increasingly daunting price tag of pro sports teams — now higher than a Dallas Cowboy in the 1990s — has made it nearly impossible to finance purchases without institutional money. “Unless you’re one of the wealthiest 50 people in the world, writing a $5 billion equity check is pretty hard for anyone,” Apollo Global co-founder Josh Harris — who led a group of over 20 in purchasing the Washington Commanders last year for a North American sports franchise record of $6 billion — told CNBC. And even though the NFL is loosening its rules, they will remain the most restrictive among the major North American sports leagues:

• A PE consortium including Blackstone, Carlyle, CVC Capital, and Dynasty Equity — reportedly nicknamed “The Avengers” — is among industry heavyweights that will pledge $12 billion for stakes in NFL teams. Approved funds and consortiums can buy a maximum 10% stake in a team and make deals with no more than six teams, CNBC reported — the NFL also informed teams it will take a cut of private equity profits on sales of ownership stakes.
• The NFL will still require that the controlling owner of an ownership group, which can’t comprise more than 25 people, have at least a 30% stake. Groups can’t borrow more than $1.4 billion, and sovereign wealth funds, which have taken huge stakes in European soccer, will remain blocked from investing.

Brotherly Shove: The value of two of the league’s most famous faces, talking about everything from football to UFOs to sandwiches to one’s love life with Taylor Swift, clocked in at $100 million Tuesday, with Amazon’s Wondery signing up as distributor of brothers Jason and Travis Kelce’s podcast “New Heights.”