Arctos Partners enters NFL with 10% stake in Buffalo Bills amid growing private equity interest

Arctos Partners, through its $9.9bn AUM Arctos Sports division, has acquired a 10% stake in the Buffalo Bills, becoming one of the first private equity firms to invest in an NFL team.

This follows recent NFL rule changes allowing PE firms to hold up to 10% stakes in franchises. The transaction provides liquidity for team owners and opens the door for institutional investors to become passive minority stakeholders.

The Miami Dolphins also secured a private equity partner during this wave of investments. Ares Management acquired a 10% stake, while NBA owners Joe Tsai and Oliver Weisberg purchased a separate 3% share.

The NFL’s new guidelines restrict private equity firms to non-voting, passive roles and cap their investments at six teams. A controlling owner must maintain a 30% stake in each franchise. Despite these limits, the NFL’s $190bn valuation and consistent revenue growth have made the league an attractive target for private equity firms like Arctos.

Arctos co-founder David O’Connor described the NFL investment as a pivotal achievement. “This opportunity validates our strategy in the sports franchise ecosystem. The Bills, with their strong fan base and international appeal, are an undervalued asset with significant growth potential,” he said.

The Buffalo Bills, valued at $5.08bn, rank 26th among NFL franchises but are gaining momentum. The team is building a $2bn stadium and has seen its valuation triple since owner Terry Pegula acquired it in 2014. The Bills have also sold minority shares to former athletes Vince Carter, Tracy McGrady, and Jozy Altidore, reflecting the rising trend of sports stars investing in franchises.

Arctos brings operational expertise and resources to its portfolio of sports investments, which includes stakes in major teams like the Golden State Warriors, L.A. Dodgers, and Paris Saint-Germain F.C. The firm’s extensive capabilities aim to support its partners in maximising value and growth.

As private equity firms like Arctos and Ares deepen their presence in sports, the NFL’s new rules highlight an evolving landscape where institutional capital plays an increasingly prominent role while respecting the tradition of controlling owners.

Source: Fortune

Can’t stop reading? Read more