The NFL private equity ownership vote, explained

Private equity is entering NFL ownership, and that’s not good for fans.

The NFL has long maintained the illusion of its teams being home-spun, family-owned entities — and the final spoiler of that illusion is likely to come on Tuesday. Owners are set to vote on a proposal which would allow up to 10 percent of a team to be sold to private equity firms, further increasing the gap between ownership and fans, while giving money making ventures a seat at the table when it comes to how a franchise operates.

Private involvement in the NFL has been of interest to several teams for some time. Current ownership rules mandate that a single “lead owner” must have at least a 30 percent stake in an organization, with no more than 25 individuals as part of an ownership group. That drastically changes with private equity, as an investment entity with potentially thousands of members can now have a stake in a team.

The elephant in the room

Wording of the vote is critical, and most important is a clause that says only “permitted” private equity firms would be able to buy in to franchises. That one word does all the heavy lifting, as it potentially blocks the largest and most controversial PIF from gaining a foothold in the NFL: Saudi Arabia’s PIF.

The Saudi PIF is a $925 billion wealth fund chaired by Mohammed bin Salman, the crown prince of Saudi Arabia. It’s his most critical venture, as bin Salman aims to diversify his nation’s wealth in preparation for fossil fuel reserve either drying up, or the world to move away from crude oil.

While those long term goals are fairly benign, the immediate impact of the Saudi PIF is to reform the global image of Saudi Arabia. It’s a pivotal element of the nation’s “sportswashing” campaign, which aims to use sport success around the globe to distract from Saudi Arabia’s human rights violations, and extremely prejudicial Sharia law. The basic concept is that by individuals will have a positive view of Saudi Arabia, or even ignore their social issues by using money to fund sport success in the west.

This has lead to the establishment of LIV Golf, a takeover of Newcastle United in the English Premier League, as well as significant investment in tennis’ ATP and WTA.

As it stands the Saudi PIF could be left off the NFL’s list of permitted investors, but things are much more complicated that that.

The devil is in the details

While the NFL is likely to ban the Saudi PIF from direct investment, it would be very easy for Saudi interests to have significant pull in the NFL through its proxies. In addition to substantial investments in sports, the Saudi PIF funnels vast amounts of wealth into other public investment funds to increase its reach into areas that would otherwise be blocked off to their investment.

SoftBank in Japan and Blackstone in the United States are two investment funds with significant ties to the Saudi PIF who theoretically could buy into the NFL, circumventing the league’s rules on “permitted” funds.

Is this bad for fans?

Unquestionably the answer is yes.

There are no NFL owners who are your friends, but it’s better to have a devil you know. The limited ownership of NFL teams allows for clearer, more transparent criticism to pass to those in charge when it comes to on-field success, fan experience, and gripes over stadium funding.

The motivations for owning an NFL team run a gamut of interests. Some crave the glory of owning a winning team, some simply like being a member of a very exclusive ownership club, and there are plenty who are in it for the money. However, when it comes to PIF there is only one goal: Turn a profit. Everything is secondary to return on investment, and it’s unclear how that will manifest itself when it comes to team ownership.

Dire possibilities range from teams playing closer to the salary floor to maximize profits, to pressure for relocation. The issue isn’t so much the 10 percent investment in isolation, but other business ventures for an owner that could be impacted by not keeping these massive investment firms happy.

It’s this factor that NFL owners haven’t fully discussed. It’s more or less designed to satiate fans from being angry by thinking “how important is 10 percent, anyway?” without the additional element that small ownership groups could be held hostage by their minority investment because of deals that exist outside the NFL, either overtly or through unspoken quid pro quo.

Of course, this is an intentionally bleak reading of what private investment could mean — but it’s a highly plausible outcome of expanding the NFL’s tight ownership rules to funds with wealth many orders of magnitude higher than the owners themselves. It’s also unclear whether there would be any ownership votes to approve funding to a specific team, which has always been the league’s failsafe against bad ownership.

This was bound to happen

The fact of the matter is that resisting private equity ownership was always a losing battle. The popularity of football has causes rights deals to swell, and with it the value of franchises has skyrocketed.

In 2014 the Buffalo Bills sold to Terry and Kim Pegula for a then-record price of $1.4B. In 2024 the Washington Commanders sold for $6.05B. The value of NFL teams will only go up, and increasingly they’re moving out of the realm of possibility for some of the richest people in the world.

This means that future ownership consortiums will need more funding, giving them power beyond their 10 percent on paper. It’s a sad, but inevitable reality of the NFL’s rampant success.

Now we just hope this doesn’t have dire consequences for fans, because NFL owners are going to pass this and don’t really care what happens next — because after all, they aren’t your friends.