How Clients Can Invest in NFL Teams
As the NFL opens up investments from private equity firms, new funds may help clients invest in their favorite teams.
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Investors can now not only wager on the hottest NFL games, but place investment bets on their favorite franchises, too.
The National Football League is one of the last major global sports leagues to allow private equity firms to take minority stakes in individual franchises — a rule that paves the way for owners to raise fresh capital as team valuations skyrocket. Apparently, there aren’t too many investors with the pockets to cover $10 billion price tags. It also opens up the possibility for clients to sink investable assets into marquee dynasties like the Super Bowl Champion Kansas City Chiefs. (Taylor Swift not included.)
“Sports are such universal and passionate topics,” said Banríon Capital Management CEO Shana Sissel. “Who doesn’t want to own a piece of their favorite team?”
Put Me In, Coach
There’s reportedly massive interest in NFL teams from private equity managers that are hoping to create the world’s most entertaining alternative investments. The NFL voted to allow a handful of private equity managers to create funds, including Ares Management, Arctos Partners, Sixth Street, and a consortium led by Blackstone, Carlyle, CVC, Dynasty Equity, and Ludis. PE firms can acquire up to a 10% stake in a team; the investments must be held for at least six years, and are non-voting.
“I assure you if Blackstone decides to raise one, it’s not going to be small,” Sissel told The Daily Upside. They’re likely not going to be available to the masses — or the mass affluent. Sissel estimates:
- The funds will only be accessible to accredited investors, or those who generally meet $1 million in investable assets minimums, or income, thresholds.
- Sissel estimated previous sports-related funds closed in about a month, so time is also of the essence.
- Space in the closed-ends funds would be somewhat limited until demand increases.
“Advisors are starting to see” the possibility of investing in sports franchises, she said. “They just don’t know where to start.”
Benchwarmers. Major League Baseball and the National Basketball Association have already opened their doors to PE funds. About a third of all teams in both the MLB and the NBA are backed by PE, according to PitchBook. Ares became the undisputed investment heavyweight after it raised a $3.7 billion fund in 2022.
The private equity plays in NFL teams could become a significant new investment in the world of alternative assets, which are expected to top $2.5 trillion by the end of 2028. While financial advisors own roughly $1.4 trillion in less than fully liquid alternative investment assets in the US alone, retail investors are projected to almost double their holdings in alts over the next three years.
“We haven’t seen that shift happening yet,” Sissel said. “It has less to do with access, and more so with a lack of education.”