Why Pension Funds Are Racing Into NFL Stakes: Hidden Upside & Risks

• You can add NFL franchise exposure without buying a whole team.
• Recent rule change lets vetted PE funds own up to 10% of a club, opening a conduit for retirement plans.
• Average NFL team value jumped 20% YoY to $7.1 bn, outpacing the S&P 500.
• Only ~150 U.S. major‑league teams exist, creating a scarcity premium for investors.
• PE giant KKR’s $1.4 bn acquisition of Arctos signals institutional confidence.
• Sports‑media funds now bundle NFL stakes with digital, real‑estate, and entertainment assets.
• Returns are historically uncorrelated with equity and bond markets, offering true diversification.

You’re probably missing the biggest low‑correlation asset class of the decade.

The NFL’s 2024 ownership rule relaxation is more than a bureaucratic tweak; it’s a catalyst that could reshape the alternative‑investment landscape for pension funds, family offices, and high‑net‑worth individuals. By permitting vetted private‑equity (PE) firms to own up to 10% of a franchise, the league has created a legally clean pathway for institutional investors to gain indirect exposure to a $7 bn‑plus asset class that has risen faster than the broader market for the past decade.

Why the NFL’s Ownership Rule Change Opens a New Frontier for Institutional Capital

The NFL’s previous stance barred any institutional ownership beyond a narrow “ownership‑group” definition. The 2024 amendment relaxes that definition, allowing approved PE firms to take minority stakes that are then bundled into fund structures accessible to retirement plans. This shift addresses two classic hurdles for large investors: scarcity and regulatory friction.

Scarcity is real—there are only about 150 franchises across the five major U.S. leagues, and each team’s valuation is in the billions. By aggregating multiple minority stakes, a single fund can provide exposure to a diversified basket of teams while staying within the 10% ownership ceiling per club. Regulatory friction is mitigated because the PE sponsor performs the due‑diligence and compliance vetting, delivering a “clean” investment vehicle to the pension trustee.

How Private‑Equity Firms Like Arctos Are Structuring the Deal

Arctos Partners pioneered the model by securing NFL approval to acquire minority positions in the Los Angeles Chargers and Buffalo Bills. The firm then raised capital from public‑pension systems—Kentucky’s County Employees Retirement System contributed roughly $100 million, and Oregon’s Public Employees Retirement Fund followed suit with indirect stakes in multiple franchises.

The structure is straightforward: investors commit capital to a closed‑end PE fund; the fund purchases a 5‑10% equity position in a team; returns flow to investors via a combination of operating cash‑flow distributions (media rights, stadium revenue, sponsorships) and capital appreciation when the franchise is sold or refinanced. Because the ownership share is minority, the PE sponsor typically negotiates preferred‑return hurdles and a “carried interest” upside, aligning its incentives with the limited partners.

Historical Valuation Trends of NFL Franchises vs. the S&P 500

Since 2015, the average NFL franchise valuation has risen at a compound annual growth rate (CAGR) of roughly 15%, compared with the S&P 500’s 10% CAGR over the same period. In 2025, Sportico reported an average team worth $7.1 bn—a 20% increase from the prior year and double the 2019 average. This outperformance stems from three macro forces:

• Media Rights Inflation: The league’s latest broadcast contracts lock in $10+ bn of annual revenue for the next decade.
• Stadium‑Centric Real Estate: Teams are monetizing surrounding districts through naming rights, mixed‑use development, and premium hospitality suites.
• Digital & Global Expansion: International games, streaming platforms, and ancillary content (e.g., NFL Network) create recurring subscription streams.

Because franchise cash flows are largely contract‑based and insulated from broader economic cycles, the asset class behaves like a “cash‑cow” that delivers stable yields (typically 6‑9% dividend‑style distributions) while appreciating in value.

Competitive Landscape: What Other Asset Managers Are Doing

Following Arctos’ success, major PE houses are scrambling to secure a slice of the pie. KKR’s $1.4 bn acquisition of Arctos is the most visible move, signaling that large‑cap firms see the sector as a long‑term growth engine. Simultaneously, diversified alternatives platforms such as CAIS Advisors have launched multi‑sport funds that blend NFL stakes with NBA, MLB, and even entertainment IPs. Their minimum investment of $25,000 opens the door for accredited investors, while institutional mandates can allocate larger blocks to capture the upside.

Meanwhile, investment banks are expanding advisory services for team owners—providing merger‑like structuring, debt financing for stadium upgrades, and secondary market liquidity solutions. This creates a full ecosystem where capital can flow from pension funds to PE sponsors to team owners and back as cash distributions.

Technical Terms Explained: “Indirect Exposure” and “Scarce Asset”

Indirect exposure means the investor does not own the underlying franchise directly but holds an interest in a fund that does. This arrangement preserves the legal separation required by the NFL while still delivering economic upside.

Scarce asset refers to a limited‑supply investment where the number of units (in this case, franchises) cannot be increased. Scarcity typically drives higher valuation multiples because demand outpaces supply.

Investor Playbook: Bull vs. Bear Cases for NFL Stake Funds

Bull Case

• Continued media‑rights inflation guarantees growing top‑line revenue.
• Stadium‑adjacent real‑estate development accelerates cash‑flow diversification.
• Digital fan‑engagement platforms (VR, streaming) expand the addressable market beyond the U.S.
• Scarcity premium intensifies as more institutional investors chase the limited 150‑team universe.
• Fund structures provide preferred returns (6‑8%) plus upside carry, aligning incentives.

Bear Case

• Regulatory backlash could tighten the 10% ownership ceiling or impose additional approvals.
• Economic downturns might depress discretionary spending on tickets and hospitality, eroding short‑term cash flow.
• Overvaluation risk: if franchise prices double every four years, a market correction could compress multiples sharply.
• Liquidity constraints—selling a minority stake often requires a secondary market buyer, which may be scarce.

For pension committees, the prudent approach is a modest allocation (2‑4% of the alternative‑asset bucket) to a diversified sports‑media fund, coupled with a strong governance framework to monitor the PE sponsor’s performance and the underlying team’s financial health.

In short, the NFL’s rule change has unlocked a rare, high‑growth, low‑correlation asset class. Savvy institutional investors who move now can secure a foothold before the scarcity premium fully materializes. Those who wait risk paying a higher price—or missing out entirely.