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