The National Football League kicks off its season with the Super Bowl Champion Philadelphia Eagles facing the Dallas Cowboys, also known to some as “America’s Team.” There is an exciting season to come on the field but for NFL teams and the investment community the bigger arena will be in their boardrooms with private equity money chasing one of the last sure bets in the media universe. Why would these financial assets be different from all other financial assets?
Back in the 1980s American Express ran a campaign called “Membership has its privileges” and there have been few more privileged memberships in the last half-century than that of sitting at the NFL ownership table. The Cowboys’ owner Jerry Jones has seen his $140 million purchase price rise to a $10 billion valuation today (even without a title in the last 30 years). Robert Kraft, owner of the New England Patriots, acquired the team for $172 million in 1994 and its estimated value today would be close to $9 billion (Kraft isn’t selling). Of course, I’m not sure anyone can top the story of the Mara family that owns the New York Giants. Their patriarch Tim Mara purchased the team for $500 in 1925 and today it is valued at over $10 billion.
The NFL financial juggernaut has only accelerated in recent years. In a world where TV ratings are like mining for gold with a small pickaxe, the NFL dominates. Despite a small decline in viewership last season, NFL games still accounted for 72 of the top 100 TV broadcasts. The league is still at the early end of its media deals which according to CNBC have a total value of $110 billion or over $12 billion a year through 2032. And if that isn’t quite enough for the league’s owners, they can opt out in 2029 and out seek ever more media money.
The flood of media money flows directly into franchise values. Look at the last decade. In 2014, the Pegula family purchased the Buffalo Bills for a then-record price of $1.4 billion. Nine years later, Josh Harris purchased the Washington Commanders, after years of team mismanagement, for over $6 billion. Who wouldn’t want in to this crowd if you’ve got the dough?
And when it comes to media money of course it’s not just TV anymore. Netflix paid $150 million to stream two games on Christmas Day, and Amazon and Peacock have spent $100 million to stream one playoff game each. The heft of the NFL’s media power today is evident in its sale of the NFL Network and RedZone to Disney and in becoming an equity partner in ESPN, one of the crown jewels of the Disney empire. ESPN has its own future to sort out, but in sea of media tumult from movie theaters to linear cable networks, that’s a sweet media spot for the NFL to jump in.
Above all other U.S. sports leagues the NFL always cultivated the ideal of its teams as family-owned businesses. We have seen control passed down through generations of families with the Rooneys and the Pittsburgh Steelers, the Davis’s – for better or worse – with the now-Las Vegas Raiders, the Bidwills with the Arizona Cardinals, and the local public ownership of the Green Bay Packers.
The league feared the implications of disparate investors with financial but no regional or emotional link to the sport or a team. Josh Harris, the Commanders’ owner, made his fortune as the co-founder of Apollo Global Management and while ownership rests with him personally and not any PE firm, his investment had to whet the appetite for more from the NFL and PE investors. The other major U.S. sports leagues all saw the handwriting on the wall earlier and approved PE investment. In fact, one of the PE firms on the NFL’s new “approved” list, Sixth Street Partners, recently put up $1 billion of the $6 billion purchase price for the NBA’s Boston Celtics.
Eventually the lure of private equity money became too much for the NFL to ignore, and just last August the NFL owners approved buy-in from PE firms up to a 10% stake in a franchise. These are “passive” investments with no voting rights, and these firms can own stakes in up to six different franchises. That’s a lot of different jerseys to buy, I guess. The NFL also gets to approve which private equity firms get this partial membership, which some have speculated might be a means to keep out money from the Saudi Arabia Public Investment Fund. But, once the gate has opened, it won’t be easy to keep too many wolves outside the door.
The investment activity in the last year is just beginning. NFL has approved several deals since the starter gun sounded last summer. Ares Management has taken a 10% stake in the Miami Dolphins (with a franchise valuation of $8 billion), and Arctos Partners has already double-dipped, taking 10% of the Buffalo Bills (over $6 billion valuation) and having been approved for the purchase of an 8% stake in the Los Angeles Chargers (“only” $5 billion likely because they play in SoFi Stadium, owned by the Rams). The other approved PE firms, including Sixth Street Partners and a consortium of PE firms that includes the Carlyle Group. These folks aren’t going to be shy on their next targets.
What can we expect going forward. More deals for sure, with every franchise in play (speculation has involved even the most bedrock of NFL franchises such as the Giants and the Chicago Bears). The most interesting question will be what happens with the future decision making and operations inside of sports franchises. The new class of investors isn’t likely to be satisfied with great seats and nice spreads in the sky boxes. What will PE firms do with their new exposure to the financial data of these privately held businesses? Do we see a restructuring of organizational infrastructures with more financial rigor? Will there be new, adjacent businesses from real estate to hospitality to AI-driven business insights create more intricate financial partnerships outside of the franchises themselves? Time for many to place their bets.
Media, /media, Business, /business, business, media, standard The National Football League kicks off its season with the Super Bowl Champion Philadelphia Eagles facing the Dallas Cowboys, also known to some as “America’s Team.” There is an exciting season to come on the field but for NFL teams and the investment community the bigger arena will be in their boardrooms with private equity money chasing one of the last sure bets in the media universe. Why would these financial assets be different from all other financial assets?
Back in the 1980s American Express ran a campaign called “Membership has its privileges” and there have been few more privileged memberships in the last half-century than that of sitting at the NFL ownership table. The Cowboys’ owner Jerry Jones has seen his $140 million purchase price rise to a $10 billion valuation today (even without a title in the last 30 years). Robert Kraft, owner of the New England Patriots, acquired the team for $172 million in 1994 and its estimated value today would be close to $9 billion (Kraft isn’t selling). Of course, I’m not sure anyone can top the story of the Mara family that owns the New York Giants. Their patriarch Tim Mara purchased the team for $500 in 1925 and today it is valued at over $10 billion.
The NFL financial juggernaut has only accelerated in recent years. In a world where TV ratings are like mining for gold with a small pickaxe, the NFL dominates. Despite a small decline in viewership last season, NFL games still accounted for 72 of the top 100 TV broadcasts. The league is still at the early end of its media deals which according to CNBC have a total value of $110 billion or over $12 billion a year through 2032. And if that isn’t quite enough for the league’s owners, they can opt out in 2029 and out seek ever more media money.
The flood of media money flows directly into franchise values. Look at the last decade. In 2014, the Pegula family purchased the Buffalo Bills for a then-record price of $1.4 billion. Nine years later, Josh Harris purchased the Washington Commanders, after years of team mismanagement, for over $6 billion. Who wouldn’t want in to this crowd if you’ve got the dough?
And when it comes to media money of course it’s not just TV anymore. Netflix paid $150 million to stream two games on Christmas Day, and Amazon and Peacock have spent $100 million to stream one playoff game each. The heft of the NFL’s media power today is evident in its sale of the NFL Network and RedZone to Disney and in becoming an equity partner in ESPN, one of the crown jewels of the Disney empire. ESPN has its own future to sort out, but in sea of media tumult from movie theaters to linear cable networks, that’s a sweet media spot for the NFL to jump in.
Above all other U.S. sports leagues the NFL always cultivated the ideal of its teams as family-owned businesses. We have seen control passed down through generations of families with the Rooneys and the Pittsburgh Steelers, the Davis’s – for better or worse – with the now-Las Vegas Raiders, the Bidwills with the Arizona Cardinals, and the local public ownership of the Green Bay Packers.
The league feared the implications of disparate investors with financial but no regional or emotional link to the sport or a team. Josh Harris, the Commanders’ owner, made his fortune as the co-founder of Apollo Global Management and while ownership rests with him personally and not any PE firm, his investment had to whet the appetite for more from the NFL and PE investors. The other major U.S. sports leagues all saw the handwriting on the wall earlier and approved PE investment. In fact, one of the PE firms on the NFL’s new “approved” list, Sixth Street Partners, recently put up $1 billion of the $6 billion purchase price for the NBA’s Boston Celtics.
Eventually the lure of private equity money became too much for the NFL to ignore, and just last August the NFL owners approved buy-in from PE firms up to a 10% stake in a franchise. These are “passive” investments with no voting rights, and these firms can own stakes in up to six different franchises. That’s a lot of different jerseys to buy, I guess. The NFL also gets to approve which private equity firms get this partial membership, which some have speculated might be a means to keep out money from the Saudi Arabia Public Investment Fund. But, once the gate has opened, it won’t be easy to keep too many wolves outside the door.
The investment activity in the last year is just beginning. NFL has approved several deals since the starter gun sounded last summer. Ares Management has taken a 10% stake in the Miami Dolphins (with a franchise valuation of $8 billion), and Arctos Partners has already double-dipped, taking 10% of the Buffalo Bills (over $6 billion valuation) and having been approved for the purchase of an 8% stake in the Los Angeles Chargers (“only” $5 billion likely because they play in SoFi Stadium, owned by the Rams). The other approved PE firms, including Sixth Street Partners and a consortium of PE firms that includes the Carlyle Group. These folks aren’t going to be shy on their next targets.
What can we expect going forward. More deals for sure, with every franchise in play (speculation has involved even the most bedrock of NFL franchises such as the Giants and the Chicago Bears). The most interesting question will be what happens with the future decision making and operations inside of sports franchises. The new class of investors isn’t likely to be satisfied with great seats and nice spreads in the sky boxes. What will PE firms do with their new exposure to the financial data of these privately held businesses? Do we see a restructuring of organizational infrastructures with more financial rigor? Will there be new, adjacent businesses from real estate to hospitality to AI-driven business insights create more intricate financial partnerships outside of the franchises themselves? Time for many to place their bets.
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