Too much of a good thing can be a bad thing. And that’s the thing with which the NFL is currently wrestling.
Franchise values keep going up. Which is good. But they’re going up at a rate that makes it harder and harder to find qualified candidates to buy teams when they are for sale. Which is bad.
As explained this week by Ben Fischer of Sports Business Journal, a special ownership committee continues to explore potential changes to the current rules. These possible tweaks include increasing the debt limit for buying a team above $1.2 billion, reducing the minimum equity to be held by the principal owner below 30 percent, and/or allowing an ownership group to have more than the current maximum investors of 25.
More significantly, the league continues to flirt with the idea of embracing institutional investors.
The goal is to ensure that franchise values can keep going up, and that individuals can continue to buy — and hold — NFL franchises. For multiple ownership groups in the past, the family wanted to keep the team after the primary owner died. The estate-tax obligation, based on value of the team, made that impossible.
The entire conversation highlights the problem that fans face. There’s no requirement that a new owner will actually be a good owner. There’s no requirement that a new owner will even be a good person (you know, the kind that won’t throw a drink on a stranger). And there’s no requirement that a new owner will know anything at all about football.
Owners become owners either by having enough money to buy a team, or by being the person named in the will. And you can’t get rid of them.
That’s why the best outcome would be to make all of them corporations. Publicly trade the stock. Hire CEOs who are actually qualified to run the team. Appoint a board of directors that can exercise real oversight when it comes to the whimsies of one person who gets up on the wrong side of the bed and implements a stupid decision.
Frankly, I don’t want that to happen. It’s far more fun to cover a league made up of multi-billion-dollar mom and pop stores. Most owners don’t know what they don’t know about the business their teams are in. And they don’t have to do much of anything in order to sit back and make more and more and more money.
The NFL currently is trying to preserve that system, mainly because the men and women who currently own teams have benefited from it. But, yes, it would be far better for the fans if these teams were ultimately owned and operated not by the ultra rich and/or those related to them by blood or marriage, but by people who actually have the objective skills, abilities, and qualifications to do so.
Some owners do. And those owners want to keep the current system in place in part because they love competing with those who don’t.
