The National Football League is now accepting investment from private equity firms. The process was a long time in the making, after peer leagues like Major League Baseball and the National Basketball Association began doing so starting in 2019.
“This is something that we’ve been considering as a league for five years, when some institutions started investing in other sports leagues,” said Kansas City Chiefs owner Clark Hunt. “We just felt it was the right time for the NFL.”
In recent years valuations of professional football teams have skyrocketed, boosted in part by soaring media rights packages. The average NFL franchise is valued at $6.5 billion, according to CNBC’s Official NFL Valuations, while the NBA’s average franchise is worth about $4.4 billion, according to Forbes.
“A lot of teams in the NBA have been at a cash-loss position every year, some in a nine-figure cash loss. But the valuations have increased much more than that,” said Sportscorp co-founder Marc Ganis. “It has been a way to create liquidity without having to borrow money and without having to do capital calls.”
Watch the video above to learn more about how the NFL’s new guidelines for private equity will work and how they may affect the league moving forward.