The NFL is gearing up to change its ownership rules in what could be a massive win for Wall Street

• Team owners will meet at the annual league meeting in March to discuss private equity.
• The investment ownership model is favored in the NBA, MLB and NHL— but not in the NFL.
• Here is what this could mean for Wall Street, sports fans, and investors.

NFL ownership is unique compared to other major league sports. When you think of the NBA, the players spring to mind before the owners. But in the NFL, the face of the owner is often as familiar to fans as any of the players.

Most owners have a long history with their teams, which are family-owned and passed down from generation to generation.

But this narrative could change as the league inches closer to opening its doors to a slew of institutional investors, including private-equity firms, venture-capital funds, and even potentially sovereign wealth funds.

Why are they considering this? Team valuations are skyrocketing, raising the bar to entry to anyone but the richest of the rich, including Silicon Valley billionaires and Wall Street tycoons.

In 2023, the average team was worth a record $5.1 billion, up 14% from the year prior, according to Forbes. The Washington Commanders is a prime example of how team valuations have shot up— the team bought and sold to billionaire Josh Harris for $6.05 billion in July.

"There are only a limited number of billionaires left who will check every box to be a lead owner," said Mark Patricof, founder of investment firm Patricof Co and operating executive at private-equity firm Crestview. "Clearly, they're going to have to have a change in the threshold of what the lead owner has to put up to control the team.

The NFL has long encouraged the family-ownership model, but it realizes that skyrocketing valuations are making it harder for owners to keep these teams within their families. Changing the rules to allow more owners with passive interests to invest in teams could help NFL families benefit from rising team values without losing control.

"In 2026, 50% of the tax exemptions that are currently in place for estate taxes are expiring," said Carrie Potter, Rice faculty and sports finance expert. "So when these teams are selling for $6 billion, the amount of estate tax that they're going to have to pay is incredibly high.'

Another reason the ownership rules may change is that there are no Black controlling owners in the NFL and less than 12 Black billionaires in the United States, according to Wikipedia, citing Forbes. There are Black owners of teams like the Denver Broncos — including Mellody Hobson, Condoleezza Rice and Sir Lewis Hamilton, but they are not controlling owners.

Therefore, the burning topic of private equity will most likely spark conversation when executives from all 32 NFL teams gather at the annual league meeting in Orlando, Florida, in a few weeks. Owners are expected to discuss what the model will look like, who stands to be affected, and how it will impact ownership diversity.

"I think the owners are going to be split," Kurt Rotthoff, finance expert and professor of economics at Seton Hall, told BI. "I think they'll be torn because of the legacy aspects that you can build by having the family or individuals or a small group of people own the team for long periods of time."

So, what will a rule change mean for institutional investors and their Wall Street brokers, as well as owners and sports fans? To better understand this, BI spoke to leading sports finance professionals, including Patricof, an investment banker who has advised Dwayne Wade and Venus Williams, and three sports finance professors from leading institutions.

Here are their thoughts.

The NFL team owners

Gil Fried, a professor at West Florida and the author of "Managing Sports Facilities" and "Sport Finance," said he thinks the owners will be the winners of any rule change because it will allow them to cash in on their investment at a high premium while potentially still maintaining a majority stake in their teams.

Opening the door to people "who aren't shy when it comes to dropping a billion dollars for part ownership of minority ownership in a team is going to be a godsend for current owners," he said.

Experts also think NFL team owners' "wealth would increase drastically," said Rotthoff— due to the considerable profits they've already made from team valuations in the past decade.

Wall Street

Wall Street will come out on top because it is made up of companies that stand to earn big fees managing these investments and acting as brokers for buyers and sellers.

Experts think the NFL won't go as far as allowing sovereign wealth funds, or funds controlled by foreign governments, to invest in sports teams. But, they think the NFL will allow teams to sell a small, passive stakes to a wide variety of other types of institutional investors, including private-equity and venture-capital firms, both of which tend to raise money from wealthy people to invest in an array of assets, whether startups or real-estate or sports teams.

Wall Street investment banks could also benefit in their role as advisors to wealthy investors and sports teams, including helping to connect buyers with sellers. Just last year, Goldman Sachs launched a new Sports Franchise Group within its investment banking team to help connect wealthy people with opportunities to invest in teams, stadiums, and other sports assets, according to the Wall Street Journal.

Investors

Investors are less likely to be winners from the NFL rules changes.

Experts believe as soon as the rules change— there could be an initial boost in team valuations as investors scramble to get a piece of the pie. But new investors may find themselves disappointed in the long term, Rotthoff said.

"I think Wall Street would see the initial honeymoon bump in terms of investors trying to jump in," he said. He compared it to much-anticipated IPOs, which can result in a stock popping on its first day of trading only to decline after the hype fades.

"It's a very risky long-term return," he said. "As more people try to own more of these teams, it would diminish the average expected return over time."

Sports Fans

Experts think sports fans stand to lose out in the long run, even if they benefit in the short term from owners having more money to invest in their teams.

Opening the door to new investment will mean a sudden influx of cash that owners could put toward some much-needed upgrades, said Potter. "A lot of the NFL facilities are aged and have a lot of upgrade upgrades that need to happen or perhaps new stadiums to be built."

But it could also mean rising costs, especially as so-called Smart money investors start demanding a return on their investment, said Fried.

"That's their whole purpose," Fried said. "They want to have a strong rate of return. The only way to get that is by finding a new revenue stream." That could mean increased concession or ticket prices, he added. And it could mean average fans "get priced out of being able to actually go to games".

Experts also believe that sports fans may lose passion if they feel like the corporation is putting on a show.

Fans may "feel like losers," said Rotthoff. This feeling may be caused because fans are used to having a "particular person that they perceive as being invested in their team and their local community to a private equity group who is probably less invested in the local areas," he said.