Business

Red Lobster is one step closer to exiting Chapter 11 bankruptcy protection after a court approved its restructuring plan.
A group of investors under the name RL Investor Holdings will acquire Red Lobster by the end of the month.
At least nine other restaurant chains have filed for bankruptcy protection this year.

The exterior of a Red Lobster restaurant in Austin, Texas, on May 20, 2024.
Brandon Bell | Getty Images

A bankruptcy court approved Red Lobster’s plan to exit Chapter 11, putting the seafood chain one step closer to exiting bankruptcy.
The company, known for its seafood offerings and cheddar biscuits, filed for bankruptcy protection in May. Red Lobster had struggled with increased competition, expensive leases, last year’s disastrous shrimp promotion and a broader pullback in consumer spending.

As part of the restructuring plan, a group of investors under the name RL Investor Holdings will acquire Red Lobster by the end of the month. Once the acquisition closes, former P.F. Chang’s CEO Damola Adamolekun will step in to lead Red Lobster. Current CEO Jonathan Tibus, who led the company through bankruptcy, will leave Red Lobster.
“This is a great day for Red Lobster,” Adamolekun said in a statement. “With our new backers, we have a comprehensive and long-term investment plan — including a commitment of more than $60 million in new funding — that will help to reinvigorate the iconic brand while keeping the best of its history.”
RL Investor Holdings includes TCW Private Credit, Blue Torch and funds managed by affiliates of Fortress Investment Group. Red Lobster will operate as an independent company.
After slimming down its restaurant portfolio, the chain currently operates 544 restaurants across the U.S. and Canada.
At least nine other restaurant chains have filed for bankruptcy protection this year. High interest rates and a pullback in consumer spending have weighed on eateries, particularly if they were already struggling to bounce back from the Covid-19 pandemic.

Don’t miss these insights from CNBC PRO More

The number of single-family offices — the in-house investment and service firms of families typically worth $100 million or more — is expected to rise from 8,000 to 10,720 by 2030, according to Deloitte Private.
They’re expected to top $5.4 trillion in assets by 2030, projecting them to have more assets than hedge funds in the coming years.
Family offices are seen as offering more privacy, more customization and more tailored programs for the next generation of the family.

Colleagues working together in the office.
Aja Koska | E+ | Getty Images

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
Family offices are expected to add more than $2 trillion in assets by 2030, as an increase in wealth concentration and a revolution in wealth management drive rapid growth in new family offices.

The number of single-family offices — the in-house investment and service firms of families typically worth $100 million or more — is expected to rise from 8,000 to 10,720 by 2030, according to a report from Deloitte Private. Their assets are expected to grow even faster, topping $5.4 trillion by 2030, up from $3.1 trillion today and more than doubling since 2019.

In total, the wealth of families with family offices is expected to top $9.5 trillion in 2030, according to the report — more than doubling over the decade.
“The growth has been explosive,” said Rebecca Gooch, global head of insights for Deloitte Private. “It’s really the past decade that has seen an acceleration in growth in family offices.”
The rise of family offices is remaking the wealth management industry and creating a powerful new force in the financial landscape. Projected to have more assets than hedge funds in the coming years, family offices have become the new stars of fundraising, with venture capital firms, private equity interests and private companies all competing to capture a slice of their rising wealth.
The growth is being driven by two broader economic forces. Increasingly, wealth is growing fastest at the top of the pyramid, as technology and globalization create winner-take-all markets and outsized rewards for tech entrepreneurs. The number of Americans worth $30 million or more grew 7.5% in 2023, to 90,700, while their fortunes surged to $7.4 trillion, according to CapGemini.

The population of centimillionaires — those worth $100 million or more — has more than doubled over the past 20 years to over 28,000, according to Henley & Partners and New World Wealth. There are now an estimated 2,700 billionaires in the world, according to Forbes, more than 2.5 times the number in 2010.
At the same time, the ultra-wealthy are changing the way they manage their investments and financial lives. Rather than handing over their fortunes to a single private bank or wealth management firm, today’s mega-wealthy are opting to create single-family offices to better represent their interests and long-term goals. Family offices are seen as offering more privacy, more customization and more tailored programs for the next generation of the family.
“They want a team that’s entirely dedicated to them, 24 hours a day,” Gooch said. “Not only with investing, but in all the different areas of their life.”
After the financial crisis, wealthy families also want advisors that represent the family’s best interests, rather than private bank or wealth management advisors incentivized by the need to sell product.
“There are some organizations that don’t have products to pitch, but a lot of them do,” said Eric Johnson, Deloitte’s private wealth leader and family office tax leader. “And, lo and behold, if you engage them, what you’re going to have to buy is kind of what they’re selling, which might not be the best for the family.” 
More than two-thirds of family offices have been created since 2000, according to Deloitte. The largest number (41%) were founded by the original wealth creators, while 30% serve the second generation (inheritors) and 19% serve the third generation.
North America is leading the family office revolution. Family office wealth in North America is expected to grow by 258% between 2019 and 2030, compared with 208% in the Asia-Pacific region. North America’s 3,180 single-family offices are expected to balloon to 4,190 by 2030, accounting for about 40% of the world’s total. Asia-Pacific has about 2,290 family offices today, expected to grow to 3,200 by 2030.
The total wealth held by families with family offices in North America has more than doubled since 2019, to $2.4 trillion. It’s expected to reach $4 trillion by 2030, according to Deloitte.

Get Inside Wealth directly to your inbox

That $5 trillion pool of capital globally has touched off a feeding frenzy on Wall Street to help family offices manage their money. From Goldman Sachs and Morgan Stanley to UBS, J.P. Morgan Private Bank, Citi Private Bank, and myriad trust companies and multifamily offices, traditional wealth-management firms are poaching family office specialists and launching new family office teams to better target the growth.
Accounting firms, tax attorneys, consulting firms and tech companies are also waking up to the power of family offices, which can now more easily outsource parts of their business to keep costs lower.
“There is a whole new arena of companies that benefit from this ecosystem,” Gooch said.
As they expand in both size and number, family offices are also becoming more institutionalized. Rather than two- or three-person shops focused on basic portfolios and arranging family travel, today’s family offices are more like boutique investment firms. The average family office has a staff of 15 people managing $2 billion, according to Deloitte.
Family offices are also changing how they invest. Instead of the old-school 60-40 stock and bond portfolios, family offices are shifting their money to alternative assets, including private equity, venture capital, real estate and private credit.
Family offices now have 46% of their total portfolio in alternative investments, according to the J.P. Morgan Private Bank Global Family Office Report. The largest amount is in private equity, at 19%. Aside from investing in private equity funds, more family offices are doing direct deals, where they invest directly in a private company.
A survey by BNY Wealth found that 62% of family offices made at least six direct investments last year, and 71% plan to make the same number of direct deals this year.
Private equity giants like Blackstone, KKR and Carlyle are building out their private wealth teams to better target family offices. Deal-makers for private companies are also discovering family offices, which can buy equity stakes or entire companies. Since family offices have long time horizons, preferring to invest for decades or even generations, they’re seen as more “patient capital” compared with private equity firms or venture capital.
“Family offices can be very solid, strong partners to invest with,” Gooch said. “I think a lot of the private companies are very grateful for their long-term patient capital and their dedication to this space.”
To support their growing assets and responsibilities, family offices are on a hiring spree. Fully 40% of family offices plan to hire more staff this year, according to Deloitte. More than a third (36%) say they plan to increase the number of services they provide to the family, or increase the number of family members served. More than a third (34%) are also increasing their reliance on outsourcing, Deloitte notes.
Deloitte said the biggest trends for family offices in the coming years will be the continued move toward “institutionalization” — with more professional management, governance and technology. More than a quarter of family offices now have multiple “branches” to serve different parts of the family, often in other countries.
And with the great wealth transfer expected to shift trillions of dollars to spouses and the next generation, more women and inheritors will start running family offices in the coming years. The average age of family office principals in the Deloitte survey was 68 years old, and 4 in 10 family offices will go through a succession process in the next decade.
While women represent 10% of the wealth holders for those with $100 million or more, they control 15% of the world’s family offices, according to the survey.
“On a like-for-like basis with men, women are somewhat more likely to become the principal of the family office,” Gooch said. “Family offices can really focus on key stages of life, like retirement or legacy planning. And making sure the next generation is prepared.”

Don’t miss these insights from CNBC PRO More

Ford Motor’s U.S. vehicle sales jumped 13.4% last month, led by increases in the company’s F-Series trucks and hybrid models.
The automaker saw an increase in all-electric vehicle sales, but traditional cars and trucks with internal combustion engines still represented 86% of Ford’s sales in August.

A Ford Raptor pickup truck is displayed for sale at a Ford dealership on August 21, 2024 in Glendale, California. 
Mario Tama | Getty Images

DETROIT — Ford Motor’s U.S. vehicle sales jumped 13.4% last month, led by increases in the company’s F-Series trucks and hybrid models.
The Detroit automaker reported sales Thursday of nearly 183,000 vehicles in August, including a 12.3% increase in trucks and a roughly 50% jump in hybrid vehicles compared with a year earlier. Its all-electric vehicle sales jumped 29% during that time, including a notable rise in its F-150 Lightning pickup.

Despite the increase in electrified vehicles, traditional cars and trucks with internal combustion engines still represented 86% of Ford’s sales last month.
Ford’s August sales outpaced overall industry estimates of a roughly 6% year-over-year increase from a year earlier, according to Barclays.

Despite steep prices and high interest rates, U.S. auto sales have remained stable in 2024, but they’re not as high as some expected to begin the year. Barclays on Thursday lowered its 2024 sales forecast from 16 million vehicles to 15.8 million, citing a 15.7 million sales pace through August.
“While potential interest rate cuts may help affordability, so long as [manufacturers] aim to keep prices elevated, it will likely be difficult for [seasonally adjusted annual rate] to surpass the ~16.0mn level,” Barclay’s Dan Levy wrote Thursday in an investor note.
Ford’s U.S. sales through August were up 4.3% to 1.4 million units.

Ford’s August sales weren’t the only double-digit increases. While not all automakers report monthly sales, the Hyundai brand reported a 22% rise in sales last month compared with August 2023.

Don’t miss these insights from CNBC PRO More

American is boosting service to Europe from its hubs in Miami, Charlotte, North Carolina, and Philadelphia.
New destinations include nonstop flights to Greece, Scotland, Spain and Italy.

Boeing 787-9 Dreamliner, from American Airlines company, taking off from Barcelona airport, in Barcelona on 24th February 2023. 
JanValls | Nurphoto | Getty Images

As social media feeds make their seasonal shift from the Parthenon to pumpkin patches, airlines are busy preparing for the 2025 Europe travel season, a bet that strong demand for international travel will continue next summer.
American Airlines on Thursday unveiled new routes to Europe for spring and summer next year. The carrier rolled out nonstop service from Chicago to Madrid starting March 30; Philadelphia to Milan starting May 23; Philadelphia to Edinburgh, Scotland, beginning May 23, back for the first time since 2019; Charlotte, North Carolina, to Athens, Greece, beginning June 5; and Miami to Rome from July 5.

Rivals United Airlines and Delta Air Lines are expected to release their 2025 travel plans in the coming weeks.
American said its trans-Atlantic capacity next summer will be up low-to-mid-single digits over this year, with executives confident that consumers will continue to prioritize travel.
“In ’23 when people saw this demand to Italy and Greece, some people speculated that it was a one-year thing. But then this year, that strength just kept going and our flights are full and the yields are strong,” said Brian Znotins, American’s senior vice president of network planning. “More capacity is warranted to address the demand.”

American’s data shows that travelers, including on other airlines, are often connecting in Europe to get to Athens, in particular, Znotins said. Next year, American said it will have four daily nonstops from the U.S. to Athens from “more U.S. airports than any other,” and that more travelers will be able to connect through American’s hubs like Charlotte.
The carrier is also bringing back other Europe flights from its Philadelphia hub to Naples, Italy; Nice, France; and Copenhagen, Denmark, as well as extending winter seasonal service between Miami and Paris into the summer season.

Boeing’s delivery delays of 787 Dreamliners over the past several years prompted American and other carriers to rethink some of their flying and cut certain international flights that the long-haul airplanes serve. American is also in the middle of reconfiguring some of its older Boeing 777s to build a bigger business class cabin.
Znotins said he and his team drew up next year’s map with both things in mind.
“There’s some level of uncertainty obviously in the aircraft delivery world and there’s a level of uncertainty with our reconfigurations,” Znotins said. “We’re confident we’ll be able to fly these routes as we’ve published them, but in an uncertain world it’s always nice to have a backstop” like other hub cities serving Athens, for example, should a passenger need to be rerouted.

Read more CNBC airline news More

Tune in to CNBC all day for coverage of the Official 2024 NFL Team Valuations

The average value of the NFL’s 32 franchises is $6.5 billion, according to CNBC’s Official 2024 NFL Team Valuations.
Pro football teams have been a lucrative asset for owners in the most popular U.S. sports league: The returns they have seen on their initial investments dwarf the gains of traditional stocks over matching time periods.
The escalation in football team values is largely the result of the league’s massive and growing media deals as well as booming stadium businesses.

Ryan Flournoy, #18 of the Dallas Cowboys, catches a touchdown pass as Matt Hankins, #23 of the Los Angeles Chargers, defends during the first half of a preseason game at AT&T Stadium in Arlington, Texas, on Aug. 24, 2024.
Ron Jenkins | Getty Images Sport | Getty Images

A National Football League team today is a $6.5 billion business.
That is the average value of the NFL’s 32 franchises, according to CNBC’s Official 2024 NFL Team Valuations. Pro football teams have been a lucrative asset for owners in the most popular U.S. sports league: The returns they have seen on their initial investments dwarf the gains of traditional stocks over matching time periods.

Take, for example, the Houston Texans, No. 11 on CNBC’s 2024 value rankings. Back in 1999, the last time the NFL expanded, the late Robert McNair agreed to buy the rights to the franchise at a purchase price of $600 million, which takes into account payment structure and the value of a deal over time. The Texans are now worth $6.35 billion, more than 10 times McNair’s fee and three times more than the gains of the S&P 500 since that year.
That’s not bad for a team that has a record of 152-202-1 over its 22 seasons and has never made it to the Super Bowl.
And the Texans aren’t alone.
Across the past 10 NFL teams to be sold, seven of the 10 outperform the S&P 500 on a percentage-gained basis in the period since the sale. The Washington Commanders and the Denver Broncos — No. 13 and No. 14 on CNBC’s 2024 team valuations list, respectively — underperform broader market gains and, notably, were sold within the past two years. The Miami Dolphins, No. 8 on CNBC’s list, also lag the S&P, but were last sold in 2009 when the stock market was emerging from a bottom after getting pummeled during the 2007-08 financial crisis.

Rising valuations

The escalation in football team values is largely the result of the league’s massive and growing media deals.

The NFL’s current television agreements with Comcast, Disney, Paramount and Fox, which began last season, are worth an average of $9.2 billion a year, 85% more than the previous deals.
Add in the streaming deals with YouTube for NFL Sunday Ticket and with Amazon Prime for Thursday Night Football, and the NFL is guaranteed an average of $12.4 billion a year through 2032 — almost double the $6.48 billion a year it collected during its previous media rights cycle.

More coverage of the 2024 Official NFL Team Valuations

On top of those bulk agreements, the league has been boosting its media revenue by selling additional streaming games.
Last season, the NFL sold exclusive streaming rights to a Wild Card playoff game to Comcast’s Peacock streaming service for $110 million, according to a person familiar with the deal.
The league sold three exclusive streaming packages for this season: two Christmas Day games on Netflix for a total of $150 million; a Wild Card game on Amazon Prime for $120 million; and an international regular-season game on Peacock for $80 million, according to the person familiar with the agreements. The league should get about $200 million for its commercial Sunday Ticket rights, which gets an array of NFL games into bars and restaurants, according to the person familiar with the matter.
All of those agreements combined bring total media rights fees to $357 million per team, up from $325 million in 2023.
CNBC sources requested anonymity to discuss the specifics of deals that aren’t publicly available.

A detail view of a broadcast camera is seen with the NFL crest and ESPN Monday Night Football logo on it during a game between the Chicago Bears and the Minnesota Vikings at Soldier Field in Chicago on Dec. 20, 2021.
Icon Sportswire | Icon Sportswire | Getty Images

A rising tide lifts all boats in the NFL. The 32 teams share the national media deal revenue evenly, along with money from leaguewide sponsorship and licensing deals and 34% of gate receipts. In 2023, $13.68 billion, or 67%, of the NFL’s $20.47 billion in revenue was shared equally.
When such large revenue sharing is combined with a salary cap that limits player spending to about 49% of revenue, teams in small markets such as Green Bay; Wisconsin; and Buffalo, New York, can compete with big-market teams in New York and Los Angeles. The small-market Kansas City Chiefs, No. 18 on CNBC’s 2024 valuation rankings, have won the past two Super Bowls and three of the past five.
But there is still a wide chasm in team values, largely due to stadiums. Teams do not share revenue from luxury suites, on-site restaurants, merchandise stores, sponsorships or non-NFL events at their stadiums.
Last year, that made a bigger difference than usual.

Taylor Swift performs during her The Eras Tour at SoFi Stadium in Inglewood, California, on Aug. 7, 2023.
Allen J. Schaben | Los Angeles Times | Getty Images

Pop star Taylor Swift performed at several NFL stadiums last year as part of her blockbuster Eras Tour, including Los Angeles’ SoFi Stadium, Tampa Bay’s Raymond James Stadium, New England’s Gillette Stadium and Philadelphia’s Lincoln Financial Field. One Eras Tour stop netted $4 million in revenue per show for the hosting stadium, according to a person familiar with the matter, who spoke on the condition of anonymity to discuss confidential information.
The Dolphins’ Hard Rock Stadium, also an Eras Tour stop, raked in more than $30 million last year from college football games, soccer matches, concerts, festivals and tennis matches — and it could double that this year, according to a person familiar with the matter.

Return on investment

The revenue sharing and salary-cap agreements also make the league very profitable.
During the 2023 season, the NFL’s 32 teams generated average revenue of $640 million and average operating income — earnings before interest, taxes, depreciation and amortization — of $127 million. The typical NFL team has an EBITDA margin of 19%.
Financial success for the NFL has meant higher premiums for team sales.
Two years ago, Walmart heir Rob Walton bought the Denver Broncos for $4.65 billion, or 8.8-times the team’s revenue. But these days, a prospective owner would be hard-pressed to pay less than 10-times revenue for a team. The average value-to-revenue multiple in CNBC’s 2024 ranking of all 32 teams is 10.2.
Last year, private equity billionaire Josh Harris purchased the Washington Commanders for $6.05 billion, or 11-times revenue. Earlier this year, hedge fund manager Ken Griffin made an unsolicited $6.05 billion offer for the Tampa Bay Buccaneers, which valued the team at 9.8-times revenue, according to a person familiar with the matter. That offer was turned down by the Glazer family, which owns the franchise.
Griffin also earlier this year offered $7.5 billion for the Miami Dolphins, or 11-times revenue, according to various media reports.
When teams do change hands, they have proven to be a smart investment.
The league’s most valuable team, the Dallas Cowboys, is worth $11 billion — 73 times what owner Jerry Jones paid for the team in 1989. The S&P 500 is up just 18-fold since Jones bought the Cowboys.

Owner Jerry Jones of the Dallas Cowboys attends training camp at River Ridge Complex in Oxnard, California, on July 24, 2021.
Jayne Kamin-oncea | Getty Images

The Cowboys posted by far the most revenue of any team in the league last year, at $1.22 billion, and the most operating income, at $550 million, in large part because of sponsorship revenue. Dallas is approaching an NFL-leading $250 million in revenue from sponsors, according to CNBC sources.
The Los Angeles Rams, No. 2 on CNBC’s 2024 valuations list, were also No. 2 in revenue, with $825 million. The Rams were also second in the league in sponsorship revenue and brought in some serious money by hosting more than 25 nonfootball events at SoFi Stadium, including six sold-out nights of Swift’s Eras Tour and three of Beyoncé’s Renaissance Tour, as well as concerts for Ed Sheeran, Metallica and Pink.
The Rams, who were in St. Louis when sports and entertainment mogul Stanley Kroenke bought the team for $750 million in 2010, are now worth $8 billion. Even factoring in the $550 million relocation fee Kroenke had to pay the league to move the team to Los Angeles, as well as a $571 million settlement fee related to legal challenges for relocating, his investment is up more than four-fold.
The rise in NFL team values explains why private equity firms are chomping at the bit to invest in the league.
For several years now, Major League Baseball, the National Basketball Association, the National Hockey League and Major League Soccer have all permitted institutional investors to buy limited partner stakes in teams. European soccer leagues such as the English Premier League have also.
The NFL followed suit just last week. The league owners voted to allow a select group of private equity firms — Ares Management, Sixth Street Partners, Arctos Partners and an investing consortium made up of Dynasty Equity, Blackstone, Carlyle Group, CVC Capital Partners and Ludis — to take up to 10% stakes in NFL franchises. The firms committed $12 billion in capital over time, people familiar with the matter told CNBC.
Allowing private equity firms to invest in the league should make it easier to finance the purchase of a team.
Even the lowest-valued team on CNBC’s list, the Cincinnati Bengals, is worth $5.25 billion.
Factoring in the league’s maximum allowable debt of $1.4 billion, that leaves an equity burden of $3.8 billion. Assuming a general partner would hold the minimum required 30%, limited partners need to put in a combined $2.7 billion to get in the game.
Disclosure: Peacock is the streaming service of NBCUniversal, the parent company of CNBC.

Join us on Sept. 10 in Los Angeles for CNBC x Boardroom’s Game Plan. This high-powered event brings together industry leaders, visionaries and influencers, along with executives and investors to explore the dynamic intersection of business, sports, music and entertainment. For more information and to request an invitation, click here. More

NFL team owners voted to allow a select group of private equity firms to acquire up to 10% of teams as valuations skyrocket in recent deals.
The league has been slow to allow private equity investment, and beyond injecting capital, the firms will essentially be silent partners.
The NFL is the last major U.S. sports league to allow private equity to take a stake in its teams.

A detailed view of the NFL shield logo on the field during a preseason game between the Los Angeles Rams and the Houston Texans at NRG Stadium in Houston on Aug. 24, 2024.
Ric Tapia | Getty Images Sport | Getty Images

The National Football League is opening its gates to private equity investors — but it is limiting their involvement in the league for now.
Last week, NFL team owners voted to allow an initial group of private equity firms to acquire up to a 10% stake of a franchise. Still, the investors are meant to take silent roles in the U.S.’ most exclusive professional sports club.

The vote followed extended discussions, and the NFL had the benefit of seeing how private equity ownership played out in other major U.S. leagues, which have allowed it since 2019.
“It really means big sports is an investment class right now,” Bain Capital co-chair Steve Pagliuca said on CNBC last week. “This isn’t a case where private equity is going to come in and have influence on the franchise.”
Many teams will likely welcome private equity’s deep pockets, industry experts said. The funding could go toward stadium upgrades and construction. It could also help to cushion the skyrocketing valuations of teams, worth an average of $6.49 billion, according to CNBC’s Official 2024 NFL Team Valuations.
While the league and its owners will welcome private equity cash, it will not give the firms a full seat at the table.

More coverage of the 2024 Official NFL Team Valuations

NFL teams have traditionally been owned by families — sometimes for multiple generations — and high net worth individuals. Purchase prices for franchises have skyrocketed in recent years, as the Washington Commanders sold for $6.25 billion in 2023, the Denver Broncos changed hands for a price of $6.2 billion in 2022 and the Carolina Panthers sold in 2018 for $2.275 billion.

“The problem is that not many people can afford a team anymore. How many families have that much money?” said Shirin Malkani, co-chair of the sports industry group at Perkins Coie. “So there is a liquidity problem if you don’t let more entities into the market as buyers. It will ultimately help valuations. This is a no-brainer.”
For team-owning families facing estate taxes, offloading a stake to private equity also opens up breathing room.
“You can use this additional liquidity to go in any direction. That 10% from private equity represents an opportunity but not a requirement,” said Anthony Mulrain, co-chair of law firm Holland & Knight’s sports industry team, adding that having access to private equity funds allows them to make those payments.

One toe in

Kansas City Chiefs wide receiver Kadarius Toney steps into the end zone and scores a touchdown during Super Bowl LVII between the Kansas City Chiefs and the Philadelphia Eagles at State Farm Stadium in Glendale, Arizona, on Feb. 12, 2023.
Angela Weiss | Afp | Getty Images

The NFL is the last major U.S. sports league to allow private equity to take a stake in its teams, and the league was likely observing them closely.
Since 2019, the National Basketball Association, Major League Baseball, the National Hockey League and Major League Soccer have begun to allow private equity ownership of up to 30% of teams.
“The NFL has been very thoughtful in its approach,” said Michael Considine, a partner at Kirkland & Ellis who leads the law firm’s pro sports efforts. “Just like in every other league that has created rules around institutional capital, these rules are created to protect the integrity of the game.”
Under the NFL’s rules, each fund or consortium will be able to do deals with up to six teams. The minimum hold period for their investments would be six years.
The league has also informally told owners and the investment firms that it intends to take a percentage of private equity profits on future sales of ownership stakes, CNBC previously reported. No other league takes a percentage of the so-called carry — a fund’s investment profits that managers typically receive as compensation.
“We thought that a minimal, and it’s very minimal — the number hasn’t been finalized yet — sharing of the profits is equitable and the private equity groups agreed,” said Cleveland Browns owner Jimmy Haslam on CNBC.
Private equity has been eager to take stakes in sports as team valuations rise, mainly due to ballooning media rights deals. But the industry will have little to do with the teams beyond supplying funding.
As investors, private equity firms often take management and board roles. The playbook for sports is different, especially in the U.S., where firms do not get much control over operations and team personnel.
While pro sports teams, especially in the NFL, tend to be a recession-proof investment, the limited partners that deploy their capital into private equity funds could still face some challenges.
Private equity investments typically have a set duration — it can range from three to seven years in many cases — and an expected return. Investments in sports teams do not offer a clear exit or a path to control, nor do they typically allow governance, which may chafe against some limited partner requirements in funds, said some private equity investors who preferred not to be named due to their investments.
“These ownership interests are basically those of a silent partner, so nothing changes for the team. It’s business as usual,” said Holland & Knight’s Mulrain.
“But many private equity firms make investments of two things: cash and human capital. So there may be some management ingenuity where the investors whisper into the owners’ ears when it comes to connectivity of the franchise and other businesses,” Mulrain added.

Deep benches

Buffalo Bills defensive line coach Eric Washington reviews plays on a Microsoft Surface tablet.
Robin Alam | Icon Sportswire | Getty Images

The NFL’s reluctance to allow private equity investment shows not only in how long it took, but also in the short list of investors initially approved to enter the mix.
Collectively, these investors have $2 trillion in assets and intend to commit $12 billion of capital to be raised, inclusive of leverage, over time, CNBC previously reported.
The approved funds each have a track record of investing in sports, as well as a large amount of money at their disposal.
The three individual firms that were given approval to invest in NFL teams have amassed a deep bench of investments in a short time period.
While Ares Management is a behemoth across the board as an investor, it officially planted its flag in sports in 2022 when it raised a $3.7 billion fund dedicated exclusively to sports and media. The fund also has an advisory board consisting of former players and sports and media executives. The firm has already been part of various transactions involving either equity or debt, in teams including European soccer’s Atletico de Madrid, MLB’s San Diego Padres and the NHL’s Ottawa Senators, among others.
One of the newer investors on the approved list, Arctos Partners, has a deep bench of team investments that put it among the likely NFL investors as league discussions occurred, according to people familiar with the matter.
Founded in 2019, the firm closed its second sports-focused fund earlier this year, totaling $4.1 billion in commitments. This was a quick follow-up to its first fund, which had closed with more than $3 billion in assets under management.
In that time, Arctos has acquired roughly two dozen stakes in sports and e-sports teams, including the NBA’s Golden State Warriors, MLB’s Los Angeles Dodgers and MLS’ Real Salt Lake. It also owns stakes in Harris Blitzer Sports & Entertainment, the owner of the NHL’s New Jersey Devils and NBA’s Philadelphia 76ers, along with Fenway Sports Group, parent of the MLB’s Boston Red Sox and NHL’s Pittsburgh Penguins.
Arctos also owns a stake in the NHL’s Tampa Bay Lightning, which is up for sale. Arctos is expected to exit its stake as part of the process, according to a person familiar with the matter.
Arctos would be the only firm approved to invest in equity across each of the five most-popular major North American sports leagues, pending final approval.
Sixth Street Partners, another firm among the initial circle of investors that can take a stake in NFL teams, invests across various industries, but has been quickly growing its footprint in media and sports. The firm has invested in the NWSL’s Bay F.C., the NBA’s San Antonio Spurs and Spanish soccer’s Real Madrid, as well as media rights in Spanish league soccer.
In addition to these three firms, a consortium made up of Dynasty Equity, Carlyle Group, CVC Capital Partners and Ludis, a platform founded by investor and former NFL running back Curtis Martin, is able to acquire stakes in teams.
The investors declined to comment beyond earlier statements released after the NFL vote.

Join us on Sept. 10 in Los Angeles for CNBC x Boardroom’s Game Plan. This high-powered event brings together industry leaders, visionaries and influencers, along with executives and investors to explore the dynamic intersection of business, sports, music and entertainment. For more information and to request an invitation, click here. More

NFL owners are content to hold on to their teams as valuations soar.
The Seattle Seahawks will likely change majority ownership in the coming years.
Beyond the Seahawks, it’s difficult to name another clear candidate.
A new rule allowing private equity ownership of up to 10% of teams can give owners more liquidity if they want to sell a small stake in their team.

Abbie Parr | Getty Images Sport | Getty Images

The Seattle Seahawks may be the next National Football League team to sell. Beyond that, it’s anyone’s guess when another franchise will change hands.
Former Seahawks owner and Microsoft co-founder Paul Allen died in 2018. Since Allen’s death, the team has been controlled by a trust run by Allen’s sister, Jody. Allen’s estate calls for the team to eventually be sold, with the proceeds going to charity. But there’s no clear timetable for a transaction to take place.

Allen’s trust has reason to wait — and it’s the same logic for why other team owners may not sell any time soon.
NFL valuations will likely keep rising in the years to come because of the league’s media rights deal, expansion and the addition of games, according to Marc Ganis, a sports consultant who advises NFL Commissioner Roger Goodell and league owners. Owners risk missing big gains if they offload teams now.
“We are not even close to the top of the market for the NFL,” said Ganis. “The NFL is still in a growth phase in terms of appreciation and in terms of net revenue.” 
The average NFL team is now worth $6.49 billion, and no team is valued at less than $5.25 billion, according to CNBC’s Official 2024 NFL Team Valuations. Seven of the last 10 NFL teams to be sold outperform the S&P 500 on a percentage-gained basis since the sale.

More coverage of the 2024 Official NFL Team Valuations

Driven by growth in leaguewide media, sponsorship and licensing deals — which are split among all 32 teams — the average franchise had $640 million in revenue and $127 million in operating income last year, according to people familiar with the teams’ finances.

The NFL’s new media rights deal fully kicked in last year. It’s an 11-year agreement that runs through 2033 and is worth more than $110 billion — an 80% increase from the league’s previous deal. There’s also a clause that allows the league to opt out of all packages except Disney’s at the end of the 2028-2029 season; the NFL has an out clause for Disney’s deal after 2030.
That option will give owners another chance at cashing in after the National Basketball Association nearly tripled the value of its own media rights in July. Hypothetical future bids from deep-pocketed technology companies such as Amazon, Netflix and Alphabet’s YouTube may lead to surges in value for the NFL’s most-watched games. TV ratings continue to increase: The 2023-24 season’s ratings jumped 7% from a year earlier, ending as the second-highest rated since data was first tracked in 1995.
“The NFL is the largest and most valuable audience in the U.S. for advertisers,” said Neal Pilson, former president of CBS Sports and founder and president of Pilson Communications. “The NBA deal will be a benchmark, but it will also be ancient history by the time the NFL renews, even if it opts out. That’s still four years away. Everyone is aware of how well the NBA did. But in the end, the NFL’s rights deal will be predicated on its audience and the revenue third parties think it can generate from being a partner.”
The expected addition of an 18th regular season game in the coming years and Goodell’s interest in boosting the NFL’s popularity internationally by adding games in Spain, Germany and Brazil should also lead to increased league revenue and higher valuations, said Ganis.
“The NFL has barely scratched the surface on international revenues,” he said.

Illiquid market

An NFL team is sold about once every 3½ years, Ganis said. Those sales are typically driven by death or scandal — making it tricky to predict when another team could change hands.
The last NFL franchise to sell was the Washington Commanders — a deal completed in 2023 after league owners effectively forced Daniel Snyder to relinquish the team amid allegations of sexual harassment and a toxic workplace. Josh Harris, who also owns the NBA’s Philadelphia 76ers and the National Hockey League’s New Jersey Devils, bought the Commanders for a record $6 billion.
Each of the last four NFL team sales has set a new record, showcasing the rise in valuations. Billionaire businessman Terry Pegula and his wife, Kim, acquired the Buffalo Bills in 2014 for $1.4 billion after the death of Ralph Wilson, the franchise’s founding owner. That sum was topped in 2018 by hedge fund manager David Tepper’s purchase of the Carolina Panthers for $2.3 billion. The Panthers sold after the NFL fined previous owner Jerry Richardson for workplace misconduct.
Rob Walton, a member of the family that owns Walmart, led a group that bought the Denver Broncos for $4.65 billion in 2022 after the death of Pat Bowlen.
Those investments have ballooned in a few short years. Today, the Bills are worth $5.35 billion, the Panthers are valued at $5.9 billion, and the Broncos’ value has increased to $6.2 billion, according to CNBC’s 2024 Valuations.
The NFL prefers to have owners that span decades because they’ll favor long-term decision-making over short-term profits, said Ganis. Modernized estate planning to reduce taxes has led to more family handoffs from one generation to another, he said.
That has further decreased full-franchise sales. The NFL mandates every team have a written succession plan in case its owner dies. The Chicago Bears are currently owned by 101-year-old Virginia Halas McCaskey, the daughter of team founder George Halas. As planned, when McCaskey dies, the Bears ownership will be distributed among her children and controlled by her eighth-oldest child, George McCaskey, the 68-year-old who currently is the team’s chairman.
“The league’s decision-makers have enormous skin in the game,” said Ganis. “They’re not paid employees with voting rights. They’re making choices thinking generationally.”

Private equity’s role

Limited franchise turnover and soaring valuations have led Goodell to favor allowing private equity ownership for the first time. NFL owners voted last week to allow select private equity firms to buy up to a 10% stake of a team. Each fund or consortium will be able to do deals with up to six teams.
The Miami Dolphins, the Bills and the Los Angeles Chargers are among the teams that will likely explore selling minority stakes to private equity, according to people familiar with the matter. The Bills are considering selling up to 25% of the team in total.
Spokespeople for those three teams declined to comment.
The initial firms approved to invest are Ares Management, Sixth Street Partners and Arctos Partners, as well as a consortium that includes Dynasty Equity, Blackstone, Carlyle Group, CVC Capital Partners and Ludis, a platform founded by investor and former NFL running back Curtis Martin. That list is likely to grow with time, said Tracy Gallagher, head of private investments at Arta Finance, a digital wealth management platform.
“The NFL has clearly put liquidity at the forefront,” said Gallagher. “This is the first of many steps toward adding more buyer options.”
The league is treading carefully and taking baby steps with private equity ownership. The NBA, the NHL and Major League Baseball allow up to 30% ownership by private equity firms. The NFL has limited ownership to 10% with select firms and intends to take a percentage of the so-called carry — the profit that fund managers keep after hitting return thresholds for their limited partners.
“I think our league is unique in that we still have 32 individual owners,” said Robert Kraft, owner of the NFL’s New England Patriots, in a CNBC interview Aug. 28. “We have a very special culture and we wanted to be mindful that we didn’t do anything to change the substance of what makes our league so great.”
“Some of the ownership groups have real problems with the illiquidity,” he said. “They have big families and have to solve a lot of problems that are not usual. And so we thought this was a great source of capital and could be done in a way that was very functional and wouldn’t affect the [team] operation,” he added.
Kraft told CNBC the league’s hesitancy to allow more than 10% private equity ownership was about highlighting teams’ roles in their local communities over making money.
“Limiting the investment to 10% is a way to keep it under control, from our point of view,” he said.
Still, the league’s onerous restrictions may limit investment interest, even as NFL franchises have a clear upward valuation trajectory, said Gallagher.
“These are crown jewel assets, but at the end of the day, private equity managers get wealthy on carry,” said Gallagher. “If you take away a portion of that, you’re taking away incentive to buy these assets.”
Gallagher also noted other standard private equity investments have downside protection and offer board seats in case valuations plummet. The NFL doesn’t have plans to allow governance rights to private equity firms at this point.
“It will be very interesting to see what exactly funds are buying and how are they protected to deliver returns to their end investors,” said Gallagher.
WATCH: New England Patriots owner Robert Kraft on new NFL private equity rules

Join us on Sept. 10 in Los Angeles for CNBC x Boardroom’s Game Plan. This high-powered event brings together industry leaders, visionaries and influencers, along with executives and investors to explore the dynamic intersection of business, sports, music and entertainment. For more information and to request an invitation, click here. More

Dear SIR/MADAM—You asked for a short cover letter to accompany my application to work in your sales department. I could spend time telling you that your company is the one place I have always wanted to work. My mother tells me that my very first words were Dassault Systèmes/Sequoia Capital/change as needed. I have a tattoo of your logo/founder’s face on my lower back. I have named all of my pets after your various product lines. I am grateful just to be given the opportunity to be rejected by you. But if you do hire me, you won’t just be getting an employee, you’ll be getting a brand evangelist. More