It’s been a year since sports-hungry private equity got access to the jewel of investments: the NFL. The consensus so far is the move has been a resounding success, even if the number of private-equity deals has been surprisingly light.
“The NFL has shown that private equity can fuel growth without losing sight of what makes the league special,” said Errol Morris, chair of the sports law practice group at Haynes Boone, a Denver-based firm which has represented both teams and private equity funds in sports. “What we’ve seen in year one is that private equity’s involvement has brought fresh resources and strategic expertise to the NFL ecosystem without disrupting the unique culture of ownership that makes the league so strong.”
As the richest sports league in the world, the NFL has significant leverage when it came to allowing PE to invest in its 32 franchises. The NFL has more restrictive guidelines around institutional money than the other major U.S. sports leagues, capping the amount of team equity that can be sold to PE at 10%; comparatively, the NBA, NHL, MLB and MLS allow 30%.
The league also requires firms to own a minimum 3% of equity and hold their stake for at least six years. Given the average NFL team is worth $7.13 billion, that’s a $214 million minimum investment, before any limited partner discounts typical of sports team equity sales. By comparison, the NHL and MLS have a $20 million minimum, while the requirements for the other leagues aren’t publicly known. A spokesperson for the NFL didn’t respond to a request for comment on its private equity partnerships.
“After one year, I’d say it’s been a success, though it’s still early days as we have only seen PE make three investments (the Bills, the Dolphins, and the Chargers,)” Kyle Walters, the private equity analyst at PitchBook, wrote in an email. “We have only seen Ares and Arctos make investments, meaning that Sixth Street, and the consortium of Carlyle, Dynasty Equity and Ludis Capital have yet to make any investments. [That’s] all the more reason to suggest that in the year ahead we could see more activity.”
The lack of deals managed to help pump up NFL valuations; the average team value is up 20% from 2024. Arctos bought into the Buffalo Bills at a $5.8 billion valuation and 8% of the Chargers at an undisclosed valuation (Tom Gores bought 27% at a $4 billion valuation almost a year ago). Ares, meanwhile, bought into the Miami Dolphins at an $8.1 billion valuation for 13% equity.
Those three teams, plus three more, also sold equity to individuals, contributing to what has been a relatively busy year in limited partnership sales for the league. It could be the presence of private equity is spurring rich individuals to pay up for limited partner stakes in anticipation of stronger future valuations thanks to deep PE pockets.
However, PE may not be so free and loose with their capital. In May, Sportico reported the 49ers sold a 6.2% stake earlier this year to individual investors at a $8.6 billion team value, while a private equity firm bid for a piece at a value $1.5 billion lower than that.
PE investment in the NFL may start getting more aggressive if a White House proposal to let retail investors direct some of their 401(k) retirement assets in private equity funds is approved. But odds are, fans investing retirement assets in the Kansas City Chiefs instead of Kansas City Southern Railroad stock is a while off.
“Proposals to expand access to retirement funds underscore the world’s growing appetite for sports as an asset class,” Morris said. “That opportunity is exciting, but it also underscores the importance of constructing thoughtful guardrails to protect both investors and the integrity of the game—which I have no doubt the NFL will continue to do.”
PitchBook’s Walters says the mechanics of offering PE funds to retirement investors will delay offerings getting to market, since specific funds would need to be set up from the handful of approved PE investors to be offered to Mom and Pop.
“We don’t know what an exit in this space will look like, it may end up being something made available only after a few years of deal activity in the NFL,” he said. “The average investor with their 401(k) or other defined contribution plans would likely prefer the ability to invest in the Chiefs than the railway stock, for example. That demand could certainly help.”