The NFL's first two private equity investments in teams saw Ares Management take a 10% stake in the Dolphins and Arctos Partners purchase 10% of the BillsGetty Images
IRVING, TEXAS -- NFL owners approved the league’s first two private equity investments in teams, green-lighting Arctos Partners’ purchase of 10% of the Bills and Ares Management’s 10% stake in the Dolphins and related assets.
Owners also approved traditional limited partners for both of those teams, and two other transactions bringing in new limited partners to the Eagles and Raiders in a flurry of year-end deals.
The parties expect to close the deals in the coming weeks.
Buffalo -- Bills owner Terry Pegula sold 20.6% of his interest in the team in total. Arctos took 10%, and a group of business executives with ties to western N.Y. and athletes acquired another 10.6%. The valuation of the deal is not yet known, but CNBC recently valued the Bills at $5.35B.
“I believe in two heads is better than one,” said Bills majority owner Terry Pegula, who will retain control and own more than 79% of the team. “Bringing in Arctos, with their experience, worldwide, in multiple sports, is a good thing, and I’m willing to listen, on the business side, to the input they may have. Our other limited [partners], the individuals, actually most of them are Bills fans from their youth. They were Bills fans before I was a Bills fan, so I’m excited to deal with them.”
Pegula said he didn’t know yet how he would use the capital raised in the equity sale, but acknowledged the cost overruns on the new Highmark Stadium, now estimated to cost $2.1B, nearly $600M more than the original price of $1.5B.
Arctos Managing Partner Doc O’Connor said the Bills were among the firm’s targets from the beginning of the NFL’s path toward allowing private equity.
“The operating team, both on and off the field, is exceptional,” O’Connor said. “They hired [Chief Operating Officer] Pete Guelli who we know for many many, years, he’s a seasoned operator. The coaching staff. They’ve been disciplined with respect to how they spend their money, and they just put an incredible product on the field, every week.”
Pegula and O’Connor both said the Bills intend to pursue fan growth in Toronto as well.
Allen & Co. represented the Bills.
Miami -- Dolphins owner Stephen Ross divested 13% of his club at a deal reported by Bloomberg to value the team at $8.1B. Along with the 10% to Ares, the Dolphins sold 2.9% to Nets owner Joe Tsai and 0.1% to Nets minority owner Oliver Weisberg. The deal includes Hard Rock Stadium and the Dolphins’ interest in the F1 Miami Grand Prix and the WTA and ATP’s Miami Open.
Philadelphia -- Eagles owner Jeffrey Lurie sold a combined 8% to Susan Kim, chairwoman of the board of Amkor Technology (3.25%), and to Zachary Peskowitz and Olivia Peskowitz Suter (4.75%). One of the two separate deals valued the Eagles at just north of $8.1B, sources said, but the other one was higher than originally reported, $8.3B. Lurie will still control 85% of the team. BDT & MSD were financial advisors to Lurie on the deal.
Las Vegas -- Raiders owner Mark Davis sold 15% of his team at an unknown valuation, including 7.5% to Egon Durban, CEO of Silver Lake and chairman of the board of Endeavor, and 7.5% to luxury golf resort developer and operator Michael Meldman, founder of Discovery Land Co. and a Las Vegas resident. Under NFL conflict of interest rules, Durban cannot hold a stake in both a team and a player representation agency, and he has promised the league Endeavor will divest WME Sports’ football division within four months of the deal closing.