The NFL is studying possible ways to relax its rules regarding the ownership of franchises. And for good reason.
The current rules are keeping the franchises from selling for as much as they could.
As one source with knowledge of the dynamics recently explained it to PFT, the desire to make it easier for individuals to purchase franchises traces to an acknowledgement that the current rules have begun to complicate the development of a robust bidding process. There’s a belief that the most recent sale — the Commanders for $6.05 billion to a group led by Josh Harris — would have resulted in a much higher final price, but for the current rules.
To keep it as simple as possible, it’s a matter of liquidity. Currently, the primary owner of a team must come up with 30 percent of the purchase price, essentially in cash. (Gold bars would also be accepted.) For a final price of $6.05 billion, that’s $1.815 billion.
The current rules also limit debt, even if it is backed up by more than sufficient assets to satisfy it.
Really rich people don’t have a safe full of cash. They don’t have billions in a savings account at the local bank. Their money is scattered around all sorts of things, a complex melange of holdings and debt and leverage and it all works. (Absent complications like, say, gross and rampant and chronic fraud.)
So, yes, the rules will change. Without it, owners who decide to sell won’t be getting what they could. And, at some point, one of them could decide to challenge the entire system that limits the manner in which an independent business can be transferred to someone else.
There’s another major benefit to these changes. It will make it easier to inject more (any) diversity into Club Oligarch. Starting with Byron Allen, who apparently can put together $10 billion to try to buy ABC but who can’t qualify to buy an NFL team.
