As the 2024 National Football League (NFL) season prepares to kick off, the league has made a landmark decision allowing its teams to sell up to a 10% stake to private equity firms. A carefully selected group of funds has been vetted and identified as eligible to make these investments, marking a significant shift in the financial landscape of the NFL.
Under the NFL’s new terms, teams may welcome multiple private equity investors, but the combined stakes must not exceed 10% of a team’s valuation. Additionally, each fund’s investment must be at least 3%, and eligible funds can invest in up to six teams. Investors will also be required to hold their stakes for at least six years before selling.
The funds approved by the NFL include some of the most prominent names in private equity: Arctos Partners LP, Ares Management Corp., Sixth Street Partners, and a consortium featuring Blackstone Inc., the Carlyle Group Inc., CVC Capital Partners, Dynasty Equity Partners Management LLC, and Ludis Capital.
This move aligns the NFL with other major North American sports leagues—including the NBA, NHL, MLB, and MLS—that have already embraced private equity investments. While NFL owners had been considering private equity for the past five years, the decision only gained serious momentum within the last year, as reported by Matt Taledo from CIO.
Among the approved funds is Arctos Partners, a major player in sports investment. Through its Arctos Sports Partners Fund I and II, the firm has raised billions, including $4.1 billion for Fund II as of April. Arctos has invested in teams such as the Golden State Warriors, Houston Astros, and Paris Saint-Germain FC, making it a dominant force in sports investment across multiple leagues.
Ares Management Corp. is another major investor, having raised $3.7 billion for its Sports, Media & Entertainment Finance Fund in 2022. The fund’s investments include a $500 million stake in Chelsea FC and investments in the San Diego Padres and McLaren Racing. Ares focuses on diverse investments across the capital structure, including senior debt, junior debt, and equity.
Sixth Street Partners, though newer to the sports space, has already made significant investments, including in FC Barcelona’s LaLiga TV rights and the San Antonio Spurs. The firm is reportedly raising its inaugural sports fund, aimed at further expanding its footprint in the sector.
Blackstone Inc., the largest private equity firm globally with over $1 trillion in assets under management, has yet to make direct investments in sports teams but remains a formidable player in the investment world. The firm has previously explored opportunities in sports media rights, including talks with the German Football League.
The Carlyle Group has invested over $3 billion in sports, media, and entertainment since 2018, focusing on media distribution and monetisation of sports rights. Carlyle recently took its first direct stake in a sports team with a $58 million investment in the NWSL’s Seattle Reign FC.
Luxembourg-based CVC Capital Partners has built a significant sports portfolio, including investments in Spanish football’s La Liga, Premiership Rugby, and the Women’s Tennis Association. CVC continues to be a major force in global sports investment.
Dynasty Equity and Ludis Capital are among the newer firms on the list. Dynasty Equity, co-founded by Jonathan Nelson and K. Don Cornwell, focuses on strategic investments across the sports ecosystem, with stakes in Liverpool FC and TMRW Sports. Ludis Capital, a Los Angeles-based venture capital firm, targets early-stage companies at the intersection of sports, technology, and entertainment.
The NFL’s decision to allow private equity investment opens new avenues for team financing and growth, providing a fresh infusion of capital into the league. With the backing of some of the world’s most powerful private equity firms, NFL teams are poised to capitalise on new opportunities in the ever-evolving world of sports business.