NFL's decision to inject private equity firms could alter $163,000,000,000 franchise ownership model: Report

Since its inception, the NFL has followed a tightly-knit ownership model, with individual or family-operated firms being the sole majority owners. However, that could all change with the NFL committee meeting that is in progress.

Private equity firms pool money from several wealthy investors and buy assets that have a chance to increase multi-fold in the future. Across the world, private equity firms have a stake in sporting franchises as well. This model has been in use in every other major league in the country, including the NBA, since 2020.

The franchise owners have been grappling with the issue of injecting more and more money into their football business, despite collectively being worth $163 billion in 2023, as per Forbes, with the Dallas Cowboys at the top, worth $9 billion. They have sought the refuge of private equity firms for relief. As per ESPN:

“A special committee of NFL owners has spent the past nine months investigating potential changes to league rules for team ownership.”

The NFL commissioner has also made his views on the matter public. In March, he said to the press:

“We're making progress. I think there'll be some changes, maybe as early as May, probably closer to October.”

This move could potentially free up the limited cash reserves of the franchise owners to pursue projects like stadium renovations since this has been one of the issues where the franchise owners have been struggling to make ends meet and rely on public money.

What is in it for the firms looking to own a piece of the NFL?

The sole responsibility of any private equity firm is to make profits for their investors. The NFL has overtaken every other sport in America and shows no signs of slowing down. Brad Humphreys, a sports economist on the matter, said:

“NFL teams are profit-making machines, and private equity would want to both share in the short-term year-to-year profits and also the long-term capital gain.”

The firms will be minority owners and will have no voting or decision-making rights. The precise specifics will be worked out at the owners' convention in Nashville, Tennessee, starting this Monday. The final decision of this summit can alter the league for the foreseeable future.