On the latest Sporticast episode, hosts Scott Soshnick and Eben Novy-Williams speak with Marc Ganis, longtime advisor to Roger Goodell and the NFL, about the league’s new private equity rules.
Ganis starts by talking about what sets the world’s richest sports league apart from its peers. For decades the NFL has gatekept its ownership ranks more closely than its peers. There are no publicly-traded teams like the NHL’s Rangers or MLB’s Braves, and no ownership group where control cycles between multiple people, like the NBA’s Bucks. The NFL has insisted that “owner” be a single person with permanent control, and Ganis says its been one of the major drivers of the league’s well-documented financial success.
Preserving that edge was “goal No. 1” for owners as they began talking about whether to allow private equity funds to buy passive minority stakes. From there, the league began looking at conservative ways it might boost valuations by widening the number of possible investors, and also share in the upside. It’s a different approach than we’ve seen in prior years from the NBA, MLB, MLS, NHL or NWSL.
Ganis walks through the various ways in which the league’s strong bargaining position showed up in the final policy. Among them: 1) the league will share in upside when PE firms eventually sell their stakes, 2) there are certain circumstances where the NFL can compel funds to sell their stakes, 3) the league has the right to see all the LPs in an approved fund, and 4) the league can compel all those LPs to adhere to the representations and warranties that govern the investments, which might be particularly relevant for sovereign wealth.
They also talk in depth about how the NFL went about approving the firms that were eventually greenlit. It’s a mix of some massive, blue chip PE groups, and then some smaller ones.
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