Why The NFL Finally Let Private Equity Onto The Playing Field

Irwin Kishner, co-chair of Herrick's Sports Law Group, was quoted in Law360 in an article discussing the NFL's policy change allowing private equity investment in team ownership. The article noted that the NFL was "very late to the party" to bring in private equity investment compared to every other major American sports league. However, the NFL's success has driven up values to the point that without private equity investment, there might not be any available buyers for NFL teams.  

"Another recent revenue stream with seemingly no ceiling for growth cannot be ignored," according to Irwin.

"The legalization of wagering and gambling also was a major factor in driving these valuations. That also makes this a very attractive investment,'' Irwin said.

The article notes that private equity investment has been part of every other league for over a decade — not only the NBA, NHL, MLB and Major League Soccer but also the women's pro leagues. "While those leagues allow as much as 30% of ownership to be private equity, compared with the 10% agreed to by the NFL, they still have restrictions similar to the ones approved by the NFL that keep the interests non-controlling and limit any single fund's reach into multiple teams."

"It's actually been rather successful in the other sports,'' Irwin said. "These funds have done a decent job in terms of investors' ability to come in and come out. It's made sense from that perspective.''

The article also discussed some potential problems the league could face over time, including that franchises could change hands more frequently. The article also pointed out that while the front facing owners will have decision making authority, the owners will still need to be answerable to their investors in some form. 

"If you're one of these funds or one of these investment groups, and you've gotten involved in these other sports, why wouldn't you want to get a piece of the NFL?'' Irwin said.

Read the full article in Law360 here. Access may require a subscription.