Jeff Bezos Could Have Competition If He Wants The NFL's Seattle Seahawks: Private Equity Investments Get League Approval

The National Football League (NFL) will soon allow private equity companies the opportunity to invest in teams, which could break records for team sales in the future and create competition for billionaires such as Jeff Bezos, who could be eyeing a team purchase.

What Happened: NFL owners approved a measure to allow private equity minority stakes in teams, which the league previously discussed earlier this year.

The new approval marks a key change to the league, which previously allowed teams to have limited partners with minority stakes but no investments from institutional investors.

Private equity funds that have league approval can invest in up to 10% ownership of teams. Each fund can hold ownership stakes in up to six NFL franchises. Teams can sell multiple stakes to different funds, but each investment has to be at least 3% and total private equity investment can not be more than 10% of the team, as reported by NFL.com.

The initial approved private equity funds are Arctos Partners, Ares Management Corp ARES, Sixth Street and a consortium group that includes Blackstone Inc BX, Carlyle Group Inc CG, CVC, Dynasty Equity and Ludis.

While additional private equity funds could be approved, the new league change does not include the ability for investment from sovereign wealth funds or pension funds.

Private equity funds will be required to hold onto their investment for six years before being able to sell their stake. Each NFL team will also have to have a controlling owner who has at least 30% ownership of the team. Each team also can have no more than 25 total owners.

The news comes ahead of the 2024 NFL season and could be bad news for billionaires looking to buy NFL teams as they go up for sale in the coming months or years.

The Washington Commanders set a North American sports franchise-record with a $6.1 billion sale valuation in 2023. Among the reported interested parties in the team was Amazon founder Jeff Bezos.

As Benzinga previously reported, Bezos could now have his eyes set on the Seattle Seahawks next, a team that will be up for sale soon as part of the instructions from former team owner Paul Allen before his death in 2018.

When the Seahawks come up for sale, Bezos could face a bidding war with private equity investors or the possibility that he can't buy 100% of the team outright. The new rules will mean there are more investors who have the capital to buy a team stake.

NFL Commissioner Roger Goodell noted "This won't change a thing. This is 10% of a team. All it is is a silent position that would allow access to capital for those teams that wish to offer 10% of their team."

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Why It's Important: Sports team ownership has been a lucrative business for many over the years with team valuations soaring thanks to new media rights deals and the growth of streaming companies wanting a piece of live sports.

Team valuations for NFL teams range from $4.71 billion (Cincinnati Bengals) to $10.32 billion (Dallas Cowboys), according to a Sportico report. The league passed the approval with a 31-1 vote with the Bengals the only team voting against the measure.

Sports fans have a limited number of public sports teams in which to invest. The new change could give investors more opportunities to invest in private equity teams that own stakes in teams.

While this won't give fans a meaningful stake or a vote on team matters and player transactions, it could create more connection with fans and more investment opportunities.

The NFL decision change could come as it allows team owners the ability to bring in capital from their ownership stake that can be used for team or stadium improvements.

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The image was created using artificial intelligence MidJourney.