With sports team valuations skyrocketing, NFL owners are pushing the league to loosen rules that would allow them to sell partial stakes in their teams.
- The owners of every National Football League (NFL) team are meeting in Phoenix, Arizona, from March 26 to 29 for the annual league conference.
- Among the agenda for the event, several team owners have begun campaigning for the right to sell stakes in their franchises to private equity and other investors.
- This could provide a valuable source of revenue as valuations on sports franchises continue to increase, Bloomberg reports.
- While the agenda for the event will not entertain the proposal, this campaign could result in the issue being explored at 2024’s annual meeting.
Why It’s News
Sports has seen a radical change in valuation in the past several years as new teams and leagues grow in popularity and the value of existing teams grows. As we previously reported, the rising popularity of soccer has seen the average American team valuation increase by 85% to $579 million since 2019.
American sports teams are alluring investments, rarely go up for sale, and can catch heavy prices when they do, with the Washington Commanders’ bid expected to reach $7 billion. Amazon found Jeff Bezos and Apollo Global co-founder Josh Harris are among the expected bidders. The Denver Broncos sold in July 2022 for $4.65 billion.
The NFL has strict rules about team ownership, such as the owning group needing a 30% equity stake and a total number of partners not exceeding 25 individuals, with companies and funds being barred. If the owners can table the issue for next year, they could see major returns from selling a large portion of their multi-billion dollar franchises, Bloomberg notes.
“If there are pressures on valuation arising from insufficient pools of available capital, leagues are likely to consider institutional capital. Other than changes to the rules and perhaps some additional disclosure risk, there are no direct costs to a league,” former NFL EVP Eric Grubman tells Sportico.