Speaker 1: This Sunday in Nevada, the Kansas City Chiefs will face
Speaker 1: off against the San Francisco forty nine Ers in Super
Speaker 1: Bowl fifty eight. Last year's Super Bowl reached more than
Speaker 1: one hundred and fifteen million viewers, and the NFL, helped
Speaker 1: along by the high profile romance between Taylor Swift and
Speaker 1: the Chiefs tid end Travis Kelcey is hoping for a
Speaker 1: new record audience, but behind the scenes, many eyes are
Speaker 1: on the ownership model both teams represent, and that's threatened
Speaker 1: by the league's explosive growth. The Chiefs and the forty
Speaker 1: nine Ers have been owned by the same families for decades.
Speaker 1: The Chiefs were founded by Lamar Hunt in nineteen sixty three,
Speaker 1: and the York family has had control of the forty
Speaker 1: nine Ers franchise since nineteen seventy seven. The league prides
Speaker 1: itself on this family first image, but spiking valuations are
Speaker 1: raising questions of succession for these families, and these questions
Speaker 1: are getting more urgent. Nearly a quarter of the league's
Speaker 1: thirty two teams have an owner over the age of eight. Today,
Speaker 1: on the show how the NFL is struggling to keep
Speaker 1: it all in the family as its franchise is sore
Speaker 1: and value from Bloomberg News, this is big take. I'm
Speaker 1: Sarah Holder. When it comes to ownership, the NFL is
Speaker 1: known to have some of the strictest rules in professional sports.
Speaker 1: There are tight limits on how owners can pass their
Speaker 1: stakes to other family members, and each team must name
Speaker 1: a single controlling owner. Rules like these have effectively shut
Speaker 1: private equity and other institutional investors out of the NFL
Speaker 1: and favored family ownership. But as original team founder's age
Speaker 1: and newer generations take over, my colleague Grandall Williams, a
Speaker 1: sports business reporter, says the league has started to see
Speaker 1: some of these family run models break down. He called
Speaker 1: in from on the ground in Nevada.
Speaker 2: Typically, I think that the NFL wants these things to
Speaker 2: stay in the family. But there's when you have people
Speaker 2: are getting older and sometimes quite frankly, they're not relinquishing
Speaker 2: the power of running a team. And if you're not
Speaker 2: prepping your children, your grandchildren, whoever your successor is going
Speaker 2: to be, then it creates an issue where hey, I
Speaker 2: don't get along with my cousin or my brother or
Speaker 2: my sister, then it creates an issue as far as
Speaker 2: who's the principal owner for a team, and you need
Speaker 2: one of those. You can't have a party of three
Speaker 2: deciding because what if one person wants one thing and
Speaker 2: two people want another, or two people want one thing
Speaker 2: and one person wants another. It creates an issue that
Speaker 2: complicates business for really a five six billion dollar franchises.
Speaker 1: How have the skyrocketing valuations of these teams impacted the
Speaker 1: way ownership is working in the league?
Speaker 2: It is a rose and a thorn, I'll say, because
Speaker 2: everyone's making more money, but there's implications, tax implications that happen.
Speaker 2: And at the end of the day, like everyone does
Speaker 2: want to want to make as much money as they can.
Speaker 2: But when you have such a big team, when these
Speaker 2: teams get so expensive to operate, and maybe families don't
Speaker 2: necessarily have the means or the funds to do it,
Speaker 2: then you need an additional source of income, which of
Speaker 2: had sources tell me that private equity is coming in March,
Speaker 2: and so the league formed this committee to take a
Speaker 2: look at things. NFL didn't its owners maybe didn't necessarily
Speaker 2: want to do it for many years, but now I
Speaker 2: think it's becoming a necessity.
Speaker 1: So the league has had discussions to potentially open up
Speaker 1: ownership stakes to private equity. What will that look like
Speaker 1: in the short term.
Speaker 2: Well, everyone's kept very tight lips on this. It's been
Speaker 2: talked about a lot over the last six to eight months.
Speaker 2: It's had a lot of pushback in a way, but
Speaker 2: I think it's going to have to happen to keep
Speaker 2: business running smoothly. Now, whether that be minority stakes, majority stakes,
Speaker 2: will have to see come March. I doubt that details
Speaker 2: for that will be revealed or leaked before then.
Speaker 3: No.
Speaker 2: Granted, some great reporters out there, including myself or maybe
Speaker 2: an owner says hey, I'm happy about this. But the
Speaker 2: thing that is going to happen that I had some
Speaker 2: sources tell me is that if SLASH, when this gets approved,
Speaker 2: there will be more minority stake self. So whether that
Speaker 2: be five to ten percent of teams. But here's the
Speaker 2: thing that people I don't think they're necessarily talking about.
Speaker 2: If you have a seven billion dollar franchise and someone
Speaker 2: buys ten percent of that team, that's seven hundred million dollars.
Speaker 2: That's a lot of money.
Speaker 4: And so.
Speaker 2: Even if it's five percent of the team, if we're
Speaker 2: talking about seven billion dollars, that's three hundred and fifty
Speaker 2: million or still are not a lot of people on
Speaker 2: planet Earth that can write a nine figure check to
Speaker 2: be like, hey, I want to own just five percent
Speaker 2: of an NFL team, So we'll have to see. I
Speaker 2: think that that rules and the rule, if it gets approved,
Speaker 2: is going to be ever changing because you're going to
Speaker 2: have private equity who are going to step in and
Speaker 2: be like, hey, I want I want to be a
Speaker 2: decision maker in this. I didn't just buy into this
Speaker 2: team to give you this money and step out of
Speaker 2: the way.
Speaker 1: How does Roger Goodell, the league commissioner, feel about this change?
Speaker 2: Well, interestingly enough, I asked him about this at his
Speaker 2: press conference. As NFL team evaluations rise, in a circle
Speaker 2: of people that can afford to purchase teams grow smaller,
Speaker 2: wondering how that complicates the session planning for owners. And
Speaker 2: on that note, if you have any updates on potential
Speaker 2: rule changes to allow private equity investors to buy into teams.
Speaker 3: Yes, listen. When franchise values increase, sometimes that makes you know,
Speaker 3: a franchise less affordable to a certain segment of our population.
Speaker 3: Less people may be available to do that. That's why
Speaker 3: we are looking at our ownership policies and looking at
Speaker 3: them in every context, and we need to be intentional
Speaker 3: to make sure that our policies not only attract the
Speaker 3: best ownership group, but diverse ownership.
Speaker 2: He spoke about that. I didn't mention anything about diversity
Speaker 2: and increasing diversity and ownership, which is I think has
Speaker 2: to happen as well. But he didn't speak to the
Speaker 2: private equity thing. I think that he knows as well
Speaker 2: that private equity is going to be good for the
Speaker 2: league in some capacity, whether that be majority stakes or
Speaker 2: minority stakes.
Speaker 1: I just think we'll have to see how do the
Speaker 1: older owners themselves, or these individual franchise owners themselves feel
Speaker 1: about the idea that more and more teams may end
Speaker 1: up owned by groups of investors.
Speaker 2: I think it's uncomfortable because when you're thinking about something,
Speaker 2: I mean, these teams run fifty sixty years, These franchises
Speaker 2: have been bought for sometimes eighteen twenty twenty five, one
Speaker 2: hundred and twenty thousand dollars, and now they're worth six billion.
Speaker 2: And when you're thinking about handing that off, yes, you're
Speaker 2: going to get a big paycheck whenever you sign it
Speaker 2: away to whomever. However, it's a pride thing when you
Speaker 2: get to say, hey, I ran this for so many years.
Speaker 2: And at the same time, if you look at the
Speaker 2: trend of what's happening in sports today, everyone's getting a
Speaker 2: new stadium, and these stadiums cost a lot of money.
Speaker 2: I mean, so far just cost five billion. The stadium
Speaker 2: I'll be in on Sunday, Allegiant costs two billion. Those
Speaker 2: are the two most expensive stadiums in the NFL and
Speaker 2: maybe probably the world. So if you have private equity
Speaker 2: come in and potentially say we'll give you seven hundred
Speaker 2: and fifty million or a billion dollars or however much
Speaker 2: the price is going to be, then that helps the
Speaker 2: stadium process.
Speaker 1: Randall also spoke to the owner of the Kansas City Chiefs,
Speaker 1: Clark Hunt.
Speaker 2: When I spoke to him on Monday about this was
Speaker 2: when you're looking at stadiums and how everybody wants one,
Speaker 2: private equity can help in that specific issue.
Speaker 1: After the break, Randall breaks down how money is in
Speaker 1: everything when it comes to running an NFL franchise. We're back.
Speaker 1: I've been speaking with my colleague Randall Williams, who's calling
Speaker 1: in from Vegas ahead of Super Bowl fifty eight on
Speaker 1: the changing landscape of NFL ownership. When other kinds of
Speaker 1: investors like private equity and sovereign wealth funds have gotten
Speaker 1: involved in other sports leagues here in the US, how
Speaker 1: else has that played out? Besides the potential for getting
Speaker 1: bigger and better stadiums, what has that investment meant for
Speaker 1: other leagues well?
Speaker 2: In terms of the product on the fields and the courts.
Speaker 2: I wish it depends on where you're looking. I mean,
Speaker 2: if you're looking at David Tepper for example, I mean
Speaker 2: we see these five six coaches across two different clubs.
Speaker 1: David Tepper is a successful hedge fund founder who bought
Speaker 1: the Carolina Panthers in twenty eighteen for over two billion
Speaker 1: dollars and is reportedly very hands on in running the team,
Speaker 1: and football commentators following David Tepper's tenure have strong misgivings
Speaker 1: about his approach.
Speaker 4: I wish he would fire himself. And by that, I
Speaker 4: don't mean sell the team. I mean just get out
Speaker 4: of the way, you know, don't meddle and allow the
Speaker 4: football people to do their job, and once you hire them,
Speaker 4: allow them some time.
Speaker 1: Teber also owns a Major League soccer franchise, the Charlotte FFC,
Speaker 1: where he also fired a coach last fall.
Speaker 2: It's taken some time. It's going to take time for
Speaker 2: a lot of these private equity guys to figure out
Speaker 2: that sometimes the best way to run these teams is
Speaker 2: to buy them and get out of the way. Like
Speaker 2: make decisions on whatever you want to be involved in,
Speaker 2: but it's going to be difficult to be involved in
Speaker 2: it everyday general management of a team if that's not
Speaker 2: something you're familiar with. Now, the thing that they are
Speaker 2: familiar with is making a lot of money. However, what's
Speaker 2: going to make you a lot of money is the
Speaker 2: product on the field at the end of the day.
Speaker 2: And if you are involved and this is not a
Speaker 2: hypothetical because this actually happens. If you are seventy years
Speaker 2: old with a billion dollars, you've made so much money
Speaker 2: over the years. Now you've bought a sports franchise, but
Speaker 2: your focus over your entire life has been financed Quite frankly,
Speaker 2: what do you know about football that makes you think
Speaker 2: that you can decide, Hey, we want this quarterback, we
Speaker 2: want that running back. And so it it's one thing
Speaker 2: to be involved in the management the stadium construction, the
Speaker 2: finances of a team. It's another thing to be involved
Speaker 2: in the everyday decisions that a team makes.
Speaker 1: Right ownership is about more than the business. It's about
Speaker 1: how teams are made up. It's about what kinds of
Speaker 1: coaches are hired. Absolutely, who are you rooting for on Sunday?
Speaker 2: Randall rooting? I'm a journalist. I can't root for a team.
Speaker 1: Journalistic ethics apply here too.
Speaker 2: Listen, listen. I have I've met many Chiefs and forty
Speaker 2: nine Ers people. I want them to continue to speak
Speaker 2: with me. Here's what I'll say. I think that the
Speaker 2: forty nine Ers have the best weapons on offense. The
Speaker 2: Chiefs have a better defense and the best player. Now
Speaker 2: they say defense wins championships, So if defense wins championships,
Speaker 2: I would take the Chiefs. If I'll take them, you
Speaker 2: know what, let me let me stopt the.
Speaker 3: Well.
Speaker 1: I'm not a sports reporter, so I can say, go
Speaker 1: nine nurs. Thanks for listening to Big take from Bloomberg News.
Speaker 1: I'm Sarah Holder. This episode was produced by Alex Sugera.
Speaker 1: Our senior producers are Naomi Shaven and Jill Duddy Carley.
Speaker 1: It was edited by Caitlin Kenney Giles Turner and Tim Annette.
Speaker 1: It was fact checked by Tiffany Choi. It was mixed
Speaker 1: by Alex Sugura. We get editorial direction from Elizabeth Ponso.
Speaker 1: Nicole Beemster. Borr is our executive producer. Sage Bauman is
Speaker 1: Bloomberg's Head of Podcasts. Special thanks to Ayra Budway for
Speaker 1: his reporting. Thanks for tuning in. We'll be back tomorrow.