The NFL is forming a special committee to consider possible changes to ownership rules

The NFL has formed a new committee to “address all aspects of ownership policy” and examine possible changes to current ownership rules that may have limited the pool of bidders in recent franchise sales.

The league informed teams of the committee’s creation in a memo last month. The committee was formed after team owners voted unanimously in July to sell Daniel Snyder’s Washington Commanders to a group led by Josh Harris for $6.05 billion.

“Following the Denver and Washington transactions, the Finance Committee concluded that it would be appropriate to examine the full range of ownership policies, including allowable leverage levels, minimum equity requirements and holding periods, appropriate investor categories, and expanding opportunities for more diverse investors.” , the NFL wrote in the memo, a copy of which was obtained by The Washington Post on Thursday.

According to the memo, owners Robert Kraft of the New England Patriots, Arthur Blank of the Atlanta Falcons, Jimmy Haslam of the Cleveland Browns and Greg Penner of the Denver Broncos will serve on the committee. Clark Hunt, owner of the Kansas City Chiefs and chairman of the NFL Finance Committee, will be an ex-officio member.

The NFL’s long-held ownership rules could limit bidders

“The special committee will attempt to complete its work in time for the 2024 annual meeting so that any recommendations it makes can be reviewed by the finance committee and the full membership prior to any further club sale,” the league wrote in its memo.

Next year’s annual league meeting is scheduled for March 24-27 in Orlando.

The NFL’s ownership rules are widely considered the most restrictive in professional sports. They require that the lead investor in an ownership group hold at least 30 percent of the shares in the purchase. No ownership group may exceed 25 people, including the lead investor. The group is not allowed to borrow more than $1.1 billion to buy the team. Private equity firms, public corporations or sovereign wealth funds are not allowed to own shares.

Harris, a private equity investor, and his investment partners paid an NFL record price to purchase the Commanders. The deal surpassed the $4.65 billion price that a group led by Walmart heir Rob Walton paid last year to buy the Broncos from the Pat Bowlen Trust.

Harris’ group prevailed in a process in which Steve Apostolopoulos, a Canadian commercial real estate developer and private equity manager, and Tilman Fertitta, the owner of the NBA’s Houston Rockets, submitted offers. Amazon founder Jeff Bezos hired New York investment firm Allen & Company to review a possible offer, but never made an offer. According to Forbes, Bezos, who owns The Washington Post, is the third richest person in the world with an estimated net worth of $167.4 billion.

The owners were happy with the sale to Harris, but there was some disappointment that Snyder was unable to prompt a $7 billion offer from Bezos, a person familiar with the owners’ views said at the time was familiar. Some analysts claimed during the trial that the NFL’s ownership rules reduced the pool of potential bidders and potentially lowered the sales price.

NFL owners approve sale of Commanders from Daniel Snyder to Josh Harris

League officials suggested in December that team owners review current ownership policies and consider whether changes should be made, according to a person familiar with the situation. In particular, owners are likely to consider allowing private equity firms to buy limited stakes in teams, adjusting the 30 percent requirement for a primary owner and raising the debt limit for purchases.

Some observers have claimed that current ownership rules reduce opportunities for minority ownership in the NFL. There are no Black principal owners of NFL franchises.

“I just believe that if the league is truly committed to ownership diversity, we need a real plan that lays out the details of how we get there,” said Rod Graves, the executive director of the Fritz Pollard Alliance. group that works closely with the NFL said in an interview earlier this year.

The Sports Business Journal first reported the formation of the new NFL committee. The NFL is forming a special committee to consider possible changes to ownership rules

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