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Private equity has finally made its way into the NFL, with the league allowing firms to buy into franchises through a 31-1 vote (with the Bengals as the dissenting vote). While firms can only purchase up to 10 percent of a team, this decision could have a significant impact on teams and their fans.
NFL owners, despite being some of the wealthiest individuals, have embraced private equity due to the billions of dollars it will inject into the league. This influx of cash could expedite funding for projects like new stadiums, thanks to the valuable real estate on which stadiums and surrounding areas sit.
Private equity firms are attracted to team ownership for various reasons, including the potential for significant returns on investment. The new NFL rules require firms to hold onto their stake for at least six years, during which they may push for decisions that increase a team’s profitability with an eye on selling in the future.
Although a 10 percent ownership may seem limited in decision-making power, owners may still prioritize keeping private equity firms satisfied. With the NFL being the last major sports league in the U.S. to allow private equity funding, fans may want to watch closely how these changes impact their favorite teams.
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