The National Football League has seen its annual revenue and franchise values skyrocket in recent years. Now, with new broadcasting rights deals with streaming partners bringing in more cash and revenue poised to rise even higher, NFL ownership rules are reportedly under consideration for major changes.
Multiple teams have been sold in the last several years., capturing the dramatic increase in franchise values and what owning a team is worth to billionaires. David Tepper bought the Carolina Panthers for $2.275 billion in 2018, a league record at the time.
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By 2022, the record was smashed when Walmart heir Rob Walton bought the Denver Broncos for $4.65 million. Just a year later, a group led by billionaire Josh Harris bought the Washington Commanders for $6.05 billion.
Before team owners officially approved the $6.05 billion Commanders’ sale, details of the agreement were examined closely by the NFL finance committee. The committee had concerns regarding the size of the ownership group and Harris’s ability to be the primary owner of the club from the perspective of liquidity.
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While some of those concerns were addressed, a primary reason the sale was approved is because the league desperately wanted to get Daniel Snyder out. The deal was approved, but the cost and the size of Harris’s group raised questions for team owners about potential necessary changes for future franchise sales.
According to Michael Rothstein of ESPN, a select committee of team owners is reviewing the league’s ownership rules to determine if they need to permit a wider pool of candidates who can buy a club.
“One of the possibilities on the table: allowing institutional wealth, including private equity, to invest in NFL franchises, which the league has never permitted.”
Michael Rothstein on league officials, team owners considering a change to widen who can buy NFL teams
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Existing NFL rules prohibit any form of ‘institutional ownership’ – pension funds, private equity firms and sovereign wealth funds – from owning a club. Furthermore, any principal owner of a team is mandated to have at least a 30 percent stake in the franchise, barring an exemption received from the league.
However, the next team that goes up for sale will likely begin with a bidding war at $6 billion and could climb much higher depending on which franchise it is. There is a very short list of billionaires with that level of liquidity, meaning the NFL will have to change its ownership rules in order to make the process easier.
For the time being, this likely means that private equity firms in the United States could eventually be permitted to buy a significant stake in an NFL franchise. In the long term, it could also open the door to sovereign wealth funds eventually becoming partners with teams. Considering how much money the NFL is making, the profitability and perception boost of owning a team will prove very appealing to things like the Public Investment Fund of Saudi Arabia.
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