The NFL’s most exclusive club is about to welcome new members.
At a special league meeting in Eagan, Minnesota, on Tuesday, the NFL’s 32 owners are expected to vote in favor of allowing selected private equity firms to buy up to 10% of teams’ shares. Each fund or consortium could do deals with up to six teams.
The first companies approved include: Ares Management, A consortium nicknamed “The Avengers,” including Sixth Street Partners, Arktos Partners and Dynasty Equity; Blackstone, The Carlyle Group The company is partnering with CVC Capital Partners, a person familiar with the matter told CNBC.
The people, who spoke on condition of anonymity to discuss terms that haven’t yet been made public, said the companies, which have a combined assets of $2 trillion, plan to raise $12 billion in capital (including leverage) over time. At least four groups of investors can each invest in up to six teams, resulting in an average of $500 million in additional capital per invested team.
NFL Commissioner Roger Goodell told CNBC in July that the league was receiving significant interest from private equity.
The league established a committee in September to explore the possibility of accepting private equity funding and has been meeting recently with selected companies.
The NFL is the last major sports league to allow private equity investment and has still approached the issue cautiously, allowing participation only from a select group and at lower fees than other professional sports leagues.
The National Basketball Association, Major League Baseball, the National Hockey League and Major League Soccer all allow up to 30% ownership by private equity.
Goodell told CNBC in July that the 10% would complement the company’s existing ownership structure and that he could increase the percentage in the future.
As valuations of NFL teams rise, the number of owners with the financial means to cover the price when a team becomes available for sale is shrinking.
That dynamic was on display last year during the sale of the Washington Commanders, which was sold for a record $6.05 billion to an ownership group that included Apollo co-founder Josh Harris and 20 other investors.
Harris said in June that the process was “a bit of a wake-up call for the NFL.”
“Unless you’re one of the 50 richest people [in the world]”Writing a $5 billion stock check is a pretty tough thing for anybody to do,” Harris told CNBC at the CNBC CEO Council Summit at the time.
The NFL’s acceptance of new capital would also free up funds for new stadiums and related projects.
The Buffalo Bills and Tennessee Titans are both currently building new stadiums, with the Cleveland Browns, Chicago Bears and Washington Commanders also actively pursuing new stadium construction for the future.
