Tom Brady agreed to a deal with Las Vegas Raiders owner Mark Davis to buy a stake in the NFL franchise earlier this year. Now, amid strong objections from NFL owners regarding the deal, new insight explains why there’s so much opposition to the deal.
Brady, who previously bought a stake in the WNBA’s Las Vegas Aces from Davis, set his sights earlier this year on becoming an NFL franchise owner. While he couldn’t afford a team on his own, the future Hall of Fame quarterback had enough to buy a minority stake in a club.
- Tom Brady career earnings:Â $333 million
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Brady and Davis ramped up negotiations in May, finalizing a deal shortly after. However, every sale involving a stake in a team requires approval from 24-of-32 owners. Both before and after the NFL owners’ meetings this week, it was apparent Las Vegas doesn’t have that support.
Mark Maske and Nicki Jhabvala of The Washington Post reported that Davis agreed to sell a 10 percent stake in the Raiders for under $200 million. With a majority of NFL owners opposed to the deal, Colts’ owner Jim Irsay explained to Ben Volin of the Boston Globe what he and his peers want to see Brady pay.
“We’re trying to work it through. The number just has to be a reasonable number for purchase price from Tom, is the only thing. If reasonable value says … that 10 percent should be $525 million, you can’t pay $175 million.”
Jim Irsay on Tom Brady’s deal to buy a percentage of the Las Vegas Raiders
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- =Â Las Vegas Raiders franchise value (Forbes): $6.2 billion
Irsay’s reasoning for being against the deal is likely shared by many of his peers. NFL owners have no problem with Brady joining their ranks, it could even prove beneficial for the league long-term. However, the specific financial details of the agreement are a significant problem.
The matter all comes down to money. Even if Brady paid $525 million for a 10 percent stake in the franchise, it would still be a discount compared to what it would cost others to buy the franchise outright. The Raiders are valued at around $6 billion and given the Washington Commanders just sold for a record-setting $6 billion, it’s reasonable to assume Las Vegas’s NFL franchise would go for a similar price.
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Yet Davis is selling Brady a 10 percent stake in Raiders’ ownership as if the team is worth less than $2 billion. Approving that deal would have ripple effects for the league, coming at a time when NFL revenue skyrockets to record highs every year.
Allowing Brady to buy any stake in an NFL franchise at a steep discount is a precedent NFL owners don’t want to set, this is a business and their goal is to drive up franchise value and annual revenue. If Brady wants to become an NFL owner, he will need to dramatically increase his offer for the league to approve it.
