The NFL is seeking a share of the profits from private equity investments as a crucial vote approaches.
- Business
- PH Chronicle Team
- August 27, 2024
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- 2 minutes read
The National Football League has notified team owners and investment firms of its intention to claim a share of potential private equity profits from future sales of ownership stakes, according to sources familiar with the situation. NFL owners are scheduled to vote on a proposal Tuesday that would permit private equity firms to acquire up to a 10% stake in teams. The owners’ meeting was taking place Tuesday afternoon.
Historically, the league has not permitted private equity investments. In contrast, Major League Baseball, the National Basketball Association, and the National Hockey League all allow investment firms to own as much as 30% of teams, with individual fund ownership capped between 15% and 20%.
No other sports league takes a percentage of the so-called carry—the portion of a fund’s investment profits that managers usually receive as compensation—from all private equity firms. It remains uncertain whether the NFL’s plan will apply universally or selectively, or what specific percentage of profits the league would claim. The NFL has informally indicated to investment firms that if they realize a profit from their investment, it seeks a share of those earnings returned to the league.
It is uncertain whether the NFL’s intention to take a cut of profits will dissuade future private equity investments or influence the owners’ vote. The league is currently in the process of vetting specific funds as potential buyers, including Blackstone Partners, Sixth Street, and CVC Partners.
The NFL chose not to comment on the matter. Over the past two decades, the total value of the league has skyrocketed from $23.46 billion to $190 billion, marking a 710% increase, according to Sportico. For comparison, the S&P 500 index has experienced a growth of approximately 660% during the same period.