Relaxed ownership rules have opened the door for private equity investment in U.S. professional sports teams. From the NFL[1] to the MLB,[2] private equity firms are becoming a dominant force in team ownership. While investment in European sports teams, particularly soccer teams, has long been common, the trend in the U.S. began largely when Major League Baseball first altered its ownership rules to permit private equity funding.[3] Today, more than 71 sports teams across the top five professional leagues in the United States have received private equity investment, with a collective valuation over $205 billion.[4]
Still, restrictions remain on how much and how long private equity firms can invest. In the NFL, for example, private equity ownership is capped at 10%.[5] Approved firms must invest at least a 3% stake and must hold that stake for at least six years before selling.[6] Setting these restrictions around private equity investment, not just in the NFL but around the other leagues, is aimed at maintaining majority control and limiting what potentially are opposing ownership viewpoints.
One largely untapped market for private equity is college athletics––but that might be about to change. College athletics, long defined by its history of amateurism and the dominance of the NCAA, has been in a state of constant flux in recent years. The emergence of name, image, and likeliness (NIL) deals has transformed the landscape.[7] In the wake of NIL deals and corresponding state legislation, there has been significant realignment across the NCAA.[8] Athletic programs, and their universities, are at a financial crossroads. For example, Ohio State’s athletic department spent $292.7 million in the 2023-24 school year, running a $38 million deficit.[9] This figure is not unique to Ohio State. Across the NCAA, and particularly across the Big Ten—one of the wealthiest athletic conferences—athletic departments are operating at deficits and are struggling to adapt to this new landscape.
To address these challenges, the Big Ten is considering private equity investment, a groundbreaking move for the NCAA should the conference move forward with this proposal.[10] Other conferences, including the American Athletic Conference and the Big 12, explored but ultimately rejected private equity investment. Now, driven by deficits, increasing NIL competitiveness, and impending revenue-sharing plans with players, the Big Ten is actively soliciting bids from private equity funds.[11] This reflects a shift from October 2024, when the Big Ten Commissioner pushed back on notions that the conference was going to seek private equity funding. Now, just five months later, and in anticipation of the House settlement that would permit revenue sharing with student athletes, private equity investment could potentially offer a much-needed financial lifeline.
Private equity has reshaped the sports industry. Its entrance into the NCAA and amateur athletics has the potential to transform an industry that is already undergoing massive change. Whether or not the Big Ten solidifies a deal to accept private equity funding, its willingness as the wealthiest conference by revenue generation to actively seeking funding signals a fundamental shift in the economics of amateur athletics.
[1] See Bryan Carlo, Private Equity Investment in the NFL: Good Business or Big Mistake?, UB Law Sports & Entertainment Forum (Feb. 10, 2025), https://ublawsportsforum.com/2025/02/10/private-equity-investment-in-the-nfl-good-business-or-big-mistake/.
[2] See Brendan Coffey, MLB Private Equity Ownership Rules: Can PE Have Stakes in Teams?, Sportico (July 3, 2024), https://www.sportico.com/feature/mlb-ownership-rules-private-equity-1234784526/.
[3] See Elizabeth Lenas et al., Major League Sport Continues to Draw Private Equity Crowds, Cleary Gottlieb, https://content.clearygottlieb.com/private-funds-bulletin/major-league-sport-continues-to-draw-private-equity-crowds/index.html.
[4] Anastasia Amoroso et al., iCapital Market Pulse: Private Equity’s Next Foray – Sports Investing, iCapital (Feb. 6, 2025), https://icapital.com/insights/investment-market-strategy/icapital-market-pulse-private-equitys-next-foray-sports-investing/.
[5] Judy Battista, NFL Owners Vote to Allow Private Equity Funds to Buy Stakes in Teams, NFL (Aug. 27, 2024), https://www.nfl.com/news/nfl-owners-vote-to-allow-private-equity-funds-to-buy-stakes-in-teams.
[6] See id.
[7] See Steven Dudash, College Athletes & the NIL: A New Marketing Frontier, Forbes (Aug. 30, 2024), https://www.forbes.com/sites/greatspeculations/2024/08/30/college-athletes–the-nil-a-new-marketing-frontier/.
[8] See Dan Roberts, The NIL Era is a Wild West. Is Anyone Surprised?, Front Office Sports (Oct. 12, 2024), https://frontofficesports.com/newsletter/nil-opened-pandoras-box/.
[9] See Scott Dochterman, Big Ten Athletic Departments’ 2024 Financial Statements: Seven Lessons from a Data Deep Dive, The Athletic (Feb. 10, 2025), https://www.nytimes.com/athletic/6123382/2025/02/10/big-ten-athletic-department-financial-statements/.
[10] See Mark T. Wilhelm, Private Equity Circling Big Ten College Conference Sports, Troutman Pepper Locke (Mar. 12, 2025), https://www.troutman.com/insights/private-equity-circling-big-ten-college-conference-sports.html.
[11] See James Parks, Big Ten Considers Private Equity Bids in Noted Reversal: Report, Sports Illustrated (Jan. 31, 2025), https://www.si.com/fannation/college/cfb-hq/news/big-ten-football-considers-private-equity.
Photo Credit – https://www.sportsbusinessjournal.com/Articles/2025/01/31/big-ten-private-equity/.
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