Changing Market Forces NFL To Reevaluate Ownership Rules 

The NFL created a new committee that will study “all aspects of ownership policy,” including rules related to liquidity requirements for purchasing teams and opening up investments currently limited to individuals. 

“The league detailed the ‘Special Committee’ in a memo it sent to teams last month, of which Front Office Sports obtained a portion on Thursday.

“Following the Denver and Washington transactions, the Finance Committee agreed that it would be appropriate to look at the full range of ownership policies, including permitted debt levels, minimum equity requirements and holding periods, eligible categories of investors, and expanding opportunities for more diverse ownership,” the memo stated. 

As NFL teams have increased in value, those with the means to purchase an NFL team have increasingly shrunk. That liquidity requirement has been cited as a significant factor why the NFL only has one non-white controlling owner, Jacksonville Jaguars owner Shad Khan. 

In a lawsuit filed Tuesday by former NFL Network reporter Jim Trotter relayed a conversation he had with Dallas Cowboys owner Jerry Jones in 2020. 

“If Blacks feel some kind of way, they should buy their own team and hire who they want to hire,” Jones allegedly said.

The Sports Business Journal was the first outlet to report on the committee’s creation. 

The Denver Broncos sold for $4.65 billion last year, and the Washington Commanders commanded $6.05 billion. Under the 30% liquidity rule in the NFL’s Bylaws and Constitution, that meant Rob Walton needed nearly $1.4 billion cash for the Broncos, and Josh Harris had to fork over $1.8 billion for Commanders as part of the worldwide record purchase price for a sports team. 

The NFL “is running out of billionaires,” a sports banker told FOS after the Commanders were put up for sale last November.  

New England Patriots owner Robert Kraft, Atlanta Falcons owner Arthur Blank, Cleveland Browns owner Jimmy Haslam, and Denver Broncos co-owner/CEO  Greg Penner are on the new committee. According to the memo, Kansas City Chiefs owner Clark Hunt, the head of the Finance Committee, will oversee the new committee. 

Harris had to assemble a massive ownership group, and reviewing the assets under the league’s current rules led to a drawn-out process that insiders expect will only get more burdensome as team valuations continue to climb. 

“The deal was hard,” Harris recently told Front Office Sports. “It was all stressful. I had to put together a group of 20 investors, raise capital, and then convince the NFL that we were going to be good stewards. So, it was a really complicated deal.”

Private equity, pension, and sovereign wealth funds cannot invest in NFL teams. Leagues like the NBA and NHL now allow PE investments, and sovereign fund investments have increasingly seeped into U.S. sports. 

Saudi Arabia’s PIF has invested heavily in sports in the U.S. and elsewhere in recent years, and the Qatar Investment Authority became an inventor earlier this year in Monumental Sports, the parent company of the Washington Capitals, Wizards, and Mystics.  

The Special Committee is expected to complete its work early next year and will present it at the league’s annual meeting scheduled for Orlando in late March.