The National Football League is working with PJT Partners in its gradual march toward accepting institutional capital.
The NFL has retained the investment bank to serve as a liaison between the league and private equity firms interested in buying stakes in teams, according to multiple people familiar with the agreement.
The league is on the verge of opening its doors to passive PE investment, a move that could dramatically reshape franchise values in the world’s richest sports league. Owners are expected to discuss the topic at league meetings next week in Nashville, and could possibly vote on a formal proposal, said two of the people, who were granted anonymity because the details are private.
Representatives for the NFL and PJT declined to comment.
The NFL is the last major U.S. league to restrict institutional ownership of any sort. While the specifics vary by league, the NBA, NHL, MLB and MLS all changed their rules in the last five years to let funds buy passive minority stakes in their franchises.
Most leagues have similar restrictions on how much of a team’s equity can be held by institutional funds, and how many different teams a single fund can buy into. They all, for example, allow teams to have up to 30% of their equity held by institutional firms. Arctos Partners, Blue Owl’s Dyal Capital, Sixth Street and Carlyle are among the groups that have already bought into U.S. sports franchises.
The NFL’s eventual rules are likely to be more restrictive. An NFL committee tasked with examining the league’s ownership has spent months meeting with some of the biggest private equity companies interested in sports, sources said, and has discussed the possibility of opening up to just a few, under specific terms. That’s a model similar to what the NBA initially tried, with Dyal, before expanding to a more open format.
That committee met last week to discuss a possible framework for allowing PE funds into the league and is planning to update owners on those conversations at Spring League Meetings, which run from May 20-22 in Nashville.
Founded by Paul Taubman, PJT Partners is an advisory-focused investment bank headquartered in New York, just a few blocks away from the NFL’s Park Avenue offices. The group is experienced in sports (and non-sports) deal-making, including recent transactions involving OneTeam, XFL and the Tennessee Titans. PJT had $1.15 billion in revenue in fiscal 2023, a 12% jump from the prior year.
The average NFL team is worth $5.14 billion, according to Sportico, by far the highest of any U.S. league. To buy the hypothetical average team under current league rules, a buyer would need at least $1.54 billion in cash, could add $1.2 billion in debt, and would still need to fund the other $2.4 billion from themselves or a set number of individuals who often get little of tangible value for their minority stakes. As franchise valuations continue to rise, that becomes a harder and harder financial proposition.
While the NFL has resisted formal changes to those rules—most of which are more rigid than those of its peers—the drumbeat has gotten louder in recent years. Control sales of the Denver Broncos and Washington Commanders raised questions about whether the league was "too big to sell," and there are currently a number of large minority stakes on the market that are yet to trade. They include a 24% stake of the Los Angeles Chargers and a roughly 25% stake in the Buffalo Bills. Billionaire Ken Griffin was recently in talks to buy a chunk of the Miami Dolphins, but those talks fell apart.
Expanding the pool of potential buyers for minority stakes would likely increase valuations across the league, a fact not lost on many owners. In response to these trends, the NFL last year formed a committee to explore possible changes. The group includes Kansas City Chiefs owner Clark Hunt, who is chairman of the NFL’s finance committee, plus Cleveland Browns owner Jimmy Haslam, Atlanta Falcons owner Arthur Blank, New England Patriots owner Robert Kraft and Denver Broncos owner Greg Penner.
The rules on institutional capital are even looser in other leagues. English soccer, for example, has teams that are majority owned by institutional funds (Chelsea) or sovereign wealth (Manchester City). In the U.S., the NWSL recently sold an expansion team (Bay FC) to a group led by private equity giant Sixth Street.
In addition to the ban on institutional money, the NFL’s ownership rules include a $1.2 billion debt limit for new buyers, a limit to how many minority owners a team can have, and a set amount that a team’s lead owner can hold (30% for incoming buyers). The new committee has also discussed the loosening of some of those rules.
The Nashville owners meetings come on the heels of a few big league announcements. The NFL said Wednesday morning that Netflix (Nasdaq: NFLX) will be the exclusive, global home of two Christmas Day games later this year, plus at least one Christmas game in 2025 and 2026. On Wednesday evening, teams will all release their full 2024 schedules, an unveiling that has become a “Super Bowl” for both ticket sales and social media teams.
