The National Football League is now accepting investment from private equity firms. The process is taking a long time, after similar leagues such as Major League Baseball and the National Basketball Association started doing it starting in 2019.
“This is something we as a league have been considering for five years, as some institutions started to invest in other sports leagues,” Kansas City Chiefs owner Clark Hunt said. “We just felt like it was the right time for the NFL.”
In recent years Professional football team ratings have skyrocketeddriven in part by soaring media rights packages. The average NFL franchise is worth $6.5 billion, according to CNBC's Official NFL Ratingswhile the average NBA franchise is worth about $4.4 billion, according to Forbes.
“Many teams in the NBA experience cash losses every year, some of them experience cash losses of up to nine figures. But their valuations have increased more than that,” said Sportscorp co-founder Marc Ganis. “This is a way to create liquidity without having to borrow money and without having to withdraw capital.”
Watch the video above to learn more about how the NFL's new guidelines for private equity will work and how it could impact the league in the future.