THE PLAYGROUND OF THE VERYWEALTHY How NFL Ownership is Bought and Sold
For many people, fine art is the ultimate statement asset. Fine art represents culture and sophistication. There are always going to be buyers and admirers. But fine art is not the only ultimate statement asset. Imagine telling your friends you own a stake in a major sports team. Imagine telling them you’re an owner. People, through limited partnerships and general partnerships, have been buying into National Football League (NFL) teams for years. And the return on investment is incredible. I’ll admit, I’m not an NFL fan myself. I never got into it, being more of a finance guy and not having time to invest in following a team. I don’t regularly watch Monday Night Football. I am a fan of the business behind the game. I’m a fan of what the NFL does behind the scenes. That’s where interesting things happen. The NFL business model is highly insulated. No teams lose money, and asset values have never gone down. There are a limited
number of teams, and they are not going to expand. They share revenue equally, and all the revenue for every team is on one contract. There are no corporate owners in the NFL, unlike Major League Baseball. There has been indication that the NFL wants to see more individuals and fewer limited partnerships (LPs), but that’s not happening. You’re not seeing individuals come to the table with the financing they need to close the deal. This is where LPs shine. Many big names have put in bids to buy an NFL team, going in with a pool of buyers or as individuals. You have names like Rush Limbaugh and Jay-Z in the mix. One was successful, the other was not. Limbaugh was part of a group who tried to buy the St. Louis Rams in 2009, but the group was met with significant opposition. For Limbaugh, it became a political and philosophical battle. He had little support within the NFL establishment. This year, billionaire rapper Jay-Z put in a bid to acquire “significant ownership interest” in an NFL team. The extensive deal was confirmed in August 2019. As part of the deal, Jay-Z and his company, Roc Nation, are in a position to “advise on selecting artists for major NFL performances like the Super Bowl.” That is to say, Jay-Z gets a say about who performs at the half- time show. That’s a major win for the rapper turned entrepreneur.
nearly at the same level. He didn’t have the same headline risk as Limbaugh, which is a factor that can influence anyone’s chances at getting ownership stake. However, on a limited-partner basis, it’s not nearly as difficult. You face a different challenge. The truth is you have to be in the game. You have to be committed to the prospect of being an owner in the NFL. It’s hard to come in as an outsider and break into the ownership club. It’s all very political. But it’s not impossible. It’s a matter of strategy and bringing a serious bid to the table. Once you break through the initial barrier, it becomes easier. There are plenty of examples of it. You have an owner who came in on an LP with Team A. He builds up his reputation in the league and goes to committee meetings. Then, he is able to go in on another LP on Team B. Once the momentum starts building, the opportunities start flowing. him, but he locks in a deal. It’s all in the execution. It’s likely he was liquid enough to close the deal and he didn’t have to rely on external financing The NFL looked at that and said yes. Of course, it’s more than just bringing financing to the table. When you go in on an LP, go in on a team you are passionate about. Once you’re locked in, you get involved. Every LP has the opportunity to sit on NFL committees. You go to quarterly meetings and engage insiders in the NFL. That is how it happens. This is what we’re working on right now. It is becoming the new ultimate statement asset — there is no denying the prestige that comes with owning a stake in an NFL team. The barrier of entry is high, but when you come to the table with serious intentions, the NFL takes notice. More details to come. You also have instances where a bidder comes in and has other people outbidding
Limbaugh and Jay-Z both came to the table with baggage. Big names that bid on NFL
ownership come under serious scrutiny. It’s not just scrutiny of their financing, but of their headlines too. The
NFL considered what Limbaugh’s name would bring to the league. He was met with backlash from players
and others throughout the organization. Jay-Z was met with scrutiny as well, but not
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