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The NFL's most exclusive club is about to let in new members.
At a special league meeting in Eagan, Minnesota, on Tuesday, the 32 owners of the National Football League are expected to vote to allow certain private equity firms to buy up to 10 percent of a team's stock. Each fund or consortium will be able to do business with up to six teams.
Initially approved companies will include: Ares Management, Sixth Street Partners and Arctos Partners, plus a consortium dubbed “The Avengers” that includes Dynasty Equity, Black stone, Carlyle Group and CVC Capital Partners, people familiar with the matter told CNBC.
The companies collectively have $2 trillion in assets and intend to deploy $12 billion of capital (including leverage) over time, the people said. With at least four investor groups able to invest in up to six teams each, that amounts to $500 million of additional capital on average for each team that receives an investment.
NFL Commissioner Roger Goodell told CNBC in July that the league has received tremendous interest from private equity.
The league created a committee last September to study the possibility of receiving private equity funding and has recently met with the selected companies.
The NFL is the last major sports league to allow private equity investment, and it continues to tread carefully by allowing only a select group to participate and at a lower rate than other professional sports leagues.
The National Basketball Association, Major League Baseball, the National Hockey League and Major League Football allow private equity ownership of up to 30%.
Goodell told CNBC in July that he believes the 10% is complementary to the existing ownership structure and that the percentage could be increased at some point in the future.
As NFL team valuations rise, this means a smaller group of owners have the money to pay the price when teams become available.
That dynamic was on full display during the sale of the Washington Commanders last year. The franchise sold for a record $6.05 billion to an ownership group that included Apollo co-founder Josh Harris and 20 other investors.
Harris said in June that the process “created a bit of a wake-up call in the NFL.”
“Unless you're one of the 50 richest people… [in the world]”Writing a $5 billion equity check is pretty difficult for anyone,” Harris told CNBC at the CNBC CEO Council Summit at the time.
As the NFL opens its doors to new capital, the money will also free up funds for new stadiums and related projects.
The Buffalo Bills and Tennessee Titans are currently in the process of building new stadiums, while the Cleveland Browns, Chicago Bears and Washington Commanders are actively looking for new stadiums in the future.
