There is no greater luxury for a football fan than to own one NFL franchise.
For some controlling owners, NFL teams are just another asset in their growing portfolio. But for other owners, it’s a family affair, passed down for generations.
NFL team valuations continues to soar because the average NFL ownership tenure is more than 40 years, and franchises only come on the market about every four years. So when they come to the market, sales are always attractive, with the richest in the country usually among the bidders.
Walmart is the beneficiary Rob Walton buy the Denver Broncos for the record $4.65 billion in June. Additionally, the NFL owners group has led the combined net worth of all 31 major owners to approximately $200 billion, according to some reports. As valuation increasingly, interested prospective buyers not only face steep financial requirements but must have deep pockets to enter the NFL collective. very deep.
So what should an NFL owner do?
- The NFL requires the principal owner or general partner to hold at least 30% of the equity. However, that minimum just won’t score the team, as it will put more pressure on the limited partners. If you can’t write a check for 50%, you might want to try buying another asset.
- The league currently allows loans of up to $1 billion for team acquisitions, up from $500 million, but new owners must meet certain terms and conditions to be offered the higher ceiling.
- For teams that have been owned by the same owner for at least 10 years, the threshold in the team for which the controlling owner is required is 1%, and the family must still have 30% equity. NFL owners voted to lower this threshold from 5% to 1% last spring. This benefits teams such as the New York Giants and Chicago Bears, with long-time family ownership.
- No more than 25 people, including general partners, can be a single franchise ownership group.
- A succession A plan is required to purchase an NFL team and is usually updated annually. And of course, there are extensive background checks, so that no skeletons can be left in the closet.
- Twenty-four of the 32 NFL owners must approve the transaction. A buyer and seller can agree on the final price, but the deal cannot be completed until it is approved by the other members.
- The NFL does not allow non-profit organizations, corporations or private institutions, for example private equity company, to buy a minority or majority stake in the franchise. Green Bay Packers is the league’s only non-profit team, which is publicly owned because they were grandfathered in before the current ownership structure. This list also includes crypto collectives; decentralized autonomous organization (DAO), which has the support of Colorado Gov. Jared Polis, interested in buying the Broncos before they were bought by Walton’s ownership group.
- The NFL repealed a rule in 2018 that prevented controlling owners from owning non-NFL teams in markets containing other NFL teams. This may be intended to avoid competition with other major sports leagues, but also for NFL owners to avoid competing with local ticket sales, sponsorships and other revenue streams, which are ultimately shared by NFL rules. That option is now on the table, a move that widens the pool for potential wealthy buyers as valuations continue to rise.
The NFL, after all, is not a private enterprise. It is a glamorous trade association, financially supported by 32 members. It’s an exclusive club that even the richest people in the world don’t get a chance to be a part of. So, if you build relationships and understand the process, you can join as well. Just don’t forget the cheddar.
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