Private equity and NFL
Private equity and the NFL consist of the approval in 2024 by the NFL of private equity ownership of teams, which will have the effect of expanding the political influence of the NFL to loot taxpayers further, while increasing the pressure on promoting gambling on games. (It should be noted that all professional sports teams are privately owned, although - due to a grandfather clause - the Green Bay Packers have a significant number of owners.)
In May 2024 owners discussed, without taking a vote, the opening of the NFL to investment by private equity firms by the end of the year,[1] and then approved it later in 2024 with the restrictions of a maximum of 10% in private equity investment in any particular team, a requirement of holding the investment for at least six years, and pre-approval of the private equity firms that are initially limited to Arctos Partners, Ares Management (NYSE: ARES) and Sixth Street Partners, as well as a group consisting of Dynasty Equity, Blackstone Inc. (NYSE: BX), Carlyle Group Inc. (Nasdaq: CG) and CVC Capital Partners Plc.
Private equity exploits tax loopholes to enrich themselves typically at the expense of the American public. If (when) passed, it can be expected that the other major sports leagues - MLB, NBA, and NHL - will adopt a similar framework.
Contents
Longer season
More games, more profits but more harm to players and fans. Private equity exists to maximize profits for its investors without any ethical rules. Allowing private equity to invade the NFL would almost certainly result in a longer NFL season with greater harm to participants and spectators.
Corruption with Gambling
Private equity firms are big investors in the gambling industry, and allowing those same interests to invest in the NFL could result in massive corruption. The evidence is strong that the 1969 Super Bowl was corrupted, as the harmful play by the quarterback Earl Morrall of the overwhelmingly favored Colts were never explained (he was ultimately benched by the bewildered coach during the game, despite having been the league MVP that year).
Private equity money managers are unlikely to have any qualms about shaving points or tossing the outcome of games if it results in millions of dollars in gambling profits. And if cross-ownership is allowed then it could become impossible to detect or prevent such corruption.
Corruption with Congress
The NFL already loots taxpayers for billions annually, and its embrace of private equity is likely to increase that corruption.
Private equity essentially owns Congress, and particularly the U.S. Senate, as many of its members have aspired to or actually have made fortunes in private equity, including Mitt Romney and Pat Toomey. As reported by Mother Jones in May 2022 (and private equity has grown in influence since then):
| “ | Among the 22 members of the House and Senate who reported investing in private equity last year, 10 were Republicans and 12 were Democrats. They ranked among the wealthiest members of Congress, an already elite club composed mostly of millionaires that has done little to get rid of the carried interest loophole, the quirk in federal tax law that allows a certain very select group of people—hedge fund and private equity managers—to collect their pay at a much lower tax rate than many Americans.[2] | ” |
The reputable OpenSecrets reports were summarized by Mother Jones:
| “ | the private equity industry spent $16.5 million lobbying Congress last year; all told, 415 of 435 members of the House and nearly every senator took money from the industry in the runup to the last election.[2] | ” |
