DealLawyers.com Blog

December 5, 2024

Private Equity: Funds Eager to Get In the NFL Game

Earlier this year, I blogged about the NFL’s decision to open its franchises up to investment by a select group of private equity funds.  According to this Institutional Investor article, those funds are chomping at the bit to get a piece of the NFL’s action, and it says that they like the NFL for the same reason that Willie Sutton liked to rob banks – “because that’s where the money is.”  Here’s an excerpt:

Even strict limits, such as a 10 percent investment cap, haven’t sapped investors’ enthusiasm. Private equity firms also are abiding by the NFL’s requirement that they remain passive, without board representation — at least for now. NFL franchise valuations have surged a cumulative 610 percent from 2004 through 2022, according to data provider Yield Street. That compares to a 317 percent increase for the S&P 500.

Football has turned into the country’s top sport. “It’s now the most popular entertainment in the U.S.,” says Paul Hardart, a professor of entertainment and media at NYU’s Stern School of Business. “And it’s expanding to young women with the romance between Travis Kelce [of the Kansas City Chiefs] and Taylor Swift.”

Football also dominates TV, with NFL games representing 93 of the 100 top-rated broadcasts in 2023. “The demand for the NFL is insatiable among the media, driving up media rights fees,” Hardart says. In 2021, the NFL signed an 11-year, $111 billion media rights deal.

The article quotes GAMCO’s Michael Galatioto as saying that he wouldn’t be surprised to see 10 to 20 deals involving the sale of minority stakes in NFL franchises in the next two years or so. I know this is only somewhat relevant to most folks M&A practice, but it’s still kind of interesting and it also gives me an excuse to let you know that I knocked off my little brother the CEO’s team last weekend and now reside in first place heading into the final week of the fantasy football regular season.

John Jenkins