BUFFALO, N.Y. (WIVB) — Buffalo Bills owners Terry and Kim Pegula are looking to cash in on a new NFL rule that allows private equity firms to invest as minority owners.
The National Football League approved the new rule in August, and the Bills have shown interest in adding new investors since at least April.
As first reported by the Sports Business Journal, any investor would receive a non-controlling stake in the team, with about 20% of the franchise being split among several potential buyers.
Andrew Brandt, former vice president of the Green Bay Packers and host of the Business of Sports podcast, said the NFL is actually quite late to the game. The National Hockey League, National Basketball Association and Major League Baseball already offer this as an option.
Brandt explained that 10% of a franchise is the maximum percentage a private equity firm can own and said that there are reports of the Bills getting that 10% from a preapproved firm.
The team has not confirmed any potential new minority owners. However, according to reports, the private equity firm Arctos Partners is in talks to buy in, and there are other investors looking at smaller percentages of ownership.
“They have amassed a group of individual investors and some are joined by a couple of former Toronto Raptors,” said Brandt. “So they’re actually selling 20% of the franchise.”
So, what exactly do these minority stakeholders get? According to Brandt, not much.
“They will not be calling plays. They will not be firing coaches,” Brandt explained. “They will not be picking players. They will not be paying players. They will not be deciding anything to do with the team.”
Essentially, investors get bragging rights and good tickets, but not much else. Brandt said the big winner in this deal is the Pegulas.
“If you value the team at say $4 billion, they just got $800 million for not giving up any control,” Brandt said.
The projected cost of the Bills’ new stadium has skyrocketed and the Pegulas are picking up more than $560 million in overruns. Selling 20% of the team makes that a little easier to swallow.
When it comes to Bills Mafia, the gameday experience isn’t going to change if this deal goes through. Brandt says this is a win-win for the team and investors. He expects this to be a trend that grows in the future.
“We reached a point with NFL evaluations where we’re going to run out of multi-billionaires,” said Brandt. “You’re going to have to allow for private equity and you’re going to have to allow fractional ownership and that’s what’s happening with the Bills.”
The NFL finance committee discussed the deal earlier this week. If the approval process goes as expected, the league could greenlight the new minority owners as soon as December.
Trina Catterson joined the News 4 team in 2024. She previously worked at WETM-TV in Elmira, a sister station of WIVB. See more of her work here.