In a move that will mean little to most fans, the NFL has made a major change to team ownership structure. On Tuesday, the NFL adopted a policy allowing private equity ownership in teams.
The initial limit is 10 percent of the franchise. Previously, teams were owned mainly by families with minority stakes sold to other individuals. Private equity makes it easier to shave off slices of the team and raise money by not relying on convincing a really rich person to make a passive investment in a football franchise.
Ben Fischer of Sports Business Journal has posted the initial parameters of the policy. The maximum will be 10 percent, whether it’s from one fund or multiple. The minimum investment by any one fund will be three percent.
Any given fund can own pieces of up to SIX different teams, which could make for some bizarre rooting interests. The same fund can hold, for example, a piece of the Steelers and a piece of the Ravens. Or a piece of the Cowboys and a piece of the Giants.
Also, a league owner and his or her immediately family can own up to three percent of a private equity fund that invests in NFL teams. Which means that, in theory, the controlling owner of one team can indirectly own a piece of up to six other teams.
The involvement of private equity shouldn’t influence the management of team business. Plenty of teams have a collection of minority owners, and they have no voice or vote in the running of the team.
That might not stop some funds from trying to influence decision-making. The bigger the fund, the more juice it might have when it comes to making its case to the people who hold the keys.