IRVING, Texas. — For the first time in NFL history, private equity firms have bought into league ownership. NFL owners voted to approve private equity firm Ares Management’s bid to purchase a stake in the Miami Dolphins along with private equity firm Arctos Partners and private equity firm Gridiron Capital’s bids to buy into the Buffalo Bills at the special league meeting Wednesday.
Ares Management purchased 10 percent of the Dolphins, the team announced after the vote. Brooklyn Nets and New York Liberty owner Joseph Tsai also purchased three percent of the Dolphins. In total, 13 percent of the Dolphins’ shares were sold. According to Bloomberg, the Dolphins’ stakes were sold at a valuation of $8.1 billion. Dolphins owner Stephen Ross will remain the controlling owner.
Miami Dolphins, Stephen M. Ross announce sale of limited interest to Ares Management for continued investment into South Florida
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— Miami Dolphins (@MiamiDolphins) December 11, 2024
Arctos Partners purchased 10 percent of the Bills. Gridiron Capital managing partner Tom Burger purchased 1.4 percent of the Bills as a part of a consortium group that’ll collectively acquire 10.6 percent of the franchise. The consortium group includes former NBA players Tracy McGrady and Vince Carter and MLS player Jozy Altidore. Overall, 20.6 percent of the Bills’ shares were sold. Terry and Kim Pegula will remain the controlling owners.
In August, NFL owners voted to allow private equity funds to purchase up to a 10 percent stake in a franchise. At least a 30 percent stake is required to be a controlling owner of a franchise, so there won’t be a situation where a private equity firm runs an NFL team. The significance to NFL owners is it could make it more practical for them to sell portions of their teams to become more liquid as franchise values continue to increase rapidly.
The NFL vetted the private equity firms that are allowed to buy into teams. Sovereign wealth funds and pension funds are not allowed to invest in NFL teams directly, but they are allowed to be investors in overall private equity funds that do.
Private equity funds that buy into teams have to hold their shares for at least six years. The thought process is it will prevent them from quickly flipping their shares in teams for profit. NFL teams are capped at having 25 members of their ownership group, which includes the controlling owner.
(Photo: Tina MacIntyre-Yee/Democrat and Chronicle / USA Today Network via Imagn Images)
