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The NFL’s most exclusive club is about to get a new member.
The NFL’s 32 owners are expected to vote in favor of allowing certain private equity firms to buy up to 10% of a team at a special league meeting in Eagan, Minn., on Tuesday. Each fund or syndicate can trade with up to six teams.
Initial approved companies will include Ares management, Sixth Street Partners and Arctos Partners, as well as a consortium nicknamed “The Avengers” (which includes Dynasty Equity), black stone, The Carlyle Group and CVC Capital Partners, People familiar with the matter told CNBC.
The companies have a combined $2 trillion in assets and plan to raise $12 billion in capital over time, including leverage, people familiar with the matter said. With at least four investor groups able to invest in up to six teams each, each team receiving investment could add an average of $500 million in capital.
NFL Commissioner Roger Goodell told CNBC in July that the league had huge interest from private equity.
The coalition formed a committee last September to study the possibility of welcoming private equity funding and has recently been meeting with selected companies.
The NFL is the last major sports league to allow private equity investment, but it remains cautious on the issue, allowing participation only to certain groups and at lower investment rates than other professional sports leagues.
The National Basketball Association, Major League Baseball, the National Hockey League and Major League Soccer all allow private equity ratios of up to 30%.
Goodell told CNBC in July that he believed the 10% was complementary to the existing ownership structure and that the percentage could increase at some point in the future.
As NFL team valuations rise, that means fewer owners have the money to pay the price tag when a team becomes available.
This dynamic was on display last year with the sale of the Washington Commanders. The franchise was sold for a record $6.05 billion to an ownership group that includes Apollo co-founder Josh Harris and 20 other investors.
Harris said in June that the process “sounded the alarm In the National Football League.
“Unless you’re one of the 50 richest people (in the world), writing a $5 billion equity check is pretty difficult for anyone,” Harris told CNBC at the CNBC CEO Council Summit at the time.
The money will also free up money for new stadiums and related projects as the NFL opens its doors to new capital.
The Buffalo Bills and Tennessee Titans are both currently building new stadiums, while the Cleveland Browns, Chicago Bears and Washington Commanders are also actively pursuing new stadiums in the future.
