The Denver Broncos are calling all billionaires as they prepare to auction off their franchise, valued at around $4 billion on the market, in what will likely turn out to be the biggest sale in sports history.
In the removed-from-reality economy of the 200 or 300 richest people in America who actually have that kind of money, an NFL team has proven to be a solid investment with consistent returns from ticket sales, TV deals, and the like providing some of the benefit, but mostly with the league’s appreciation rate skyrocketing. Yahoo! Sports reports that NFL franchises have appreciated by 600 percent in the past two decades.
Owning a sports franchise is one thing, but an NFL franchise in this day and age has become a different beast altogether, with league bylaws making it available only to the richest of the richest of the rich — and within that already small group, there has to be someone interested in buying it.
For a new owner to be approved, 24 of the existing owners have to OK the purchase, and the new buyer, as a majority investor, must own at least 30 percent of the franchise. Thirty percent of four billion is $1.2 billion, and that’s the absolute minimum in liquid assets that we’re looking at here.
It seems like fake money at this point, and I have to wonder when we ask the question: is this how things should be? Is there a real benefit in requiring someone to step up and spend more money than most of us will ever see in our lifetimes on a sports team? NFL money is difficult to comprehend in its enormous quantity — in 2021, the NFL as a whole made nearly $10 billion in total revenue, which gets split evenly between the teams, so there’s not a huge risk in buying a “bad” franchise (although venue-related sales are not evenly distributed). Ten billion dollars. I mean, not to get too off topic here, but it’s no wonder that they seem to think that they operate on a different playing field than the rest of us (Washington Football Team investigation, CTE coverups, etc), nor that they will do anything to maintain their status and popularity with the American public (again — WFT investigation, CTE coverups, etc).
At some point, this ownership system will come crashing down due to lack of interest in the extremely tiny population that has the money to make a franchise purchase in cash. I mean, we can probably name a good chunk of them off the tops of our heads, although some of the more famous names have purposefully stayed away from sports ownership. The league’s current bylaws prevent corporations from becoming principal investors — one has to wonder whether this is because the league’s ownership circle is still so traditionally family-centered, as 12 existing owners inherited the team from a relative at least one generation before them who either founded or purchased the franchise, with five more having taken over control from a deceased husband or brother. But we’re in a different era now — if the valuations are in the multi-billion range, something has got to give.
NFL ownership is very much an old boys’ club, in part due to the nature of the family ownerships throughout the league. Per Yahoo!, there are very few of the “new class of Silicon Valley billionaires” who are interested in buying an NFL franchise, shrinking the customer base even further. Ownership comes with responsibility not only to the team and the league, but to the city that the franchise is based in, which can be a steep demand.
The other major leagues in the U.S., including the MLB, NHL, and NBA, have all begun allowing private equity investors into the ownership circle — which the NFL has still not bent on, though they likely will soon, as they realize that there is, at some point, going to be a cap on what a single human individual is willing to spend to become a majority owner of a team. Institutional investors can raise that cap. But for now, even if the principal owner can scrounge together $2 billion-plus in limited or partial ownership investments, that’s a lot of money for a lot of people to cough up. Former Broncos QBs John Elway and Peyton Manning have reportedly expressed interest in investing in opposing ownership auction groups.