NFL owners vote to allow private equity funds to buy stakes in teams

The NFL owners approved a proposal allowing private equity funds to purchase modest stakes in teams, for now. The NFL's ownership regulations have undergone a dramatic change. Previously, a team might have limited partners, but institutional investment, money collected from investors was never permitted as a component of ownership.

According to a number of reports, Mike Brown, the owner of the Cincinnati Bengals, was the only owner to vote against the motion. This implies that authorised funds or groups will now be able to purchase passive interests without participating in team decision-making.

According to the rules, a fund may invest in up to six franchises, with a three percent minimum commitment. Any private equity fund investing must commit a minimum of US$2 billion in money and keep the investment for a minimum of six years. It will be limited to allocating no more than 20% of its funds to a single investment.

Arctos Partners, Ares Management, Sixth Street, and a consortium fronted by former NFL player Curtis Martin and made up of Blackstone, Carlyle, CVC Capital Partners, Dynasty Equity, and Ludis are among the approved funds. Arctos is the only company that can make investments in all five of the main North American leagues that are most popular.

The companies plan to raise $12 billion in financing over time, according to CNBC. This implies that any franchise that receives an investment will receive an additional financial infusion of roughly US$500 million on average.

The NFL is the biggest sports league in North America that has allowed private equity ownership, but at the lowest stake. The league has additionally verified that while they are still not permitted to directly invest in teams, sovereign wealth funds and pension funds are permitted to hold up to 7.5% of an authorised fund.

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