The National Football League, known as the NFL, has devised a new strategy to expand its investor margin and it aims at its current ownership policies.
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In September 2023, the NFL formed a committee to explore modifying or completely changing its long-standing ownership policies in hopes of expanding its investor pull.
For several years, the NFL has been the only North American sports league to prohibit private equity ownership for any of its franchises.
Other U.S. sports leagues, including the National Basketball League, Major League Baseball, the National Hockey League, the National Women's Soccer League, and Major League Soccer, all allow private equity ownership of up to 30%.
On Tuesday, NFL owners voted to change the league's ownership structure, allowing private equity firms to buy up to a 10% stake in a team. For the vote to pass, 24 out of 32 members must vote yes to implement this new rule. The number of yes votes has not been publicly disclosed, but the plan was passed.
An unusual new game plan
Qualifying for this exciting investment opportunity is no easy task; the new guidelines for potential buyers will be unusually strict and come with a heavy price tag.
In this new structure, approved buyers must be committed to their purchase for at least six years. They will also have no governance power, can only buy a maximum of six different teams, and cannot make preferred equity investments.
Image source: USAToday Sports
Unlike the rest of the franchises, the Green Bay Packers will be an exception to this rule change since they have a unique community-based ownership structure where fans can purchase shares to create a publicly owned corporation.
Already approved private companies include Ares Management, Arctos Partners, Blackstone, Carlyle, CVC, and Dynasty Equity. Most companies are known as sports team investors or renowned names in the investment field.
An all-American lucrative investment
The NFL is not a publicly traded company but a trade association consisting of 32 teams. The football association has been for-profit since 2015 and distributes its revenue among its teams.
This American league has an aggregated value of approximately $163 billion and a generated estimated annual revenue of over $20 billion, making it the world's most lucrative sports league.
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Due to its revenue-sharing structure, the NFL has no monetary value to investors, yet it is a prominent piece of American tradition engraved in the country's culture.
The Super Bowl is the most popular sporting event in the U.S., with 58 seasons and approximately 123.4 million viewers as of 2024.
As of now, no single person can buy NFL stock, yet one can invest in the sports business or invest in sports-affiliated companies, including Nike (NKE) , Abercrombie & Fitch Co. (ANF) , Dick's Sporting Goods (DKS) , and Madison Square Garden Sports Corp (MSGS) .
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