SBJ Football: More on the NFL’s cut of the private equity action

Every private equity investment in an NFL team starts with an upfront $500,000 fee to the league itself, sources tell me and my colleague Chris Smith. It could be just the beginning of the NFL’s profit sharing, which also seems likely to include a percentage of a fund’s return on a team investment upon exit (however, we are still hearing considerable uncertainty on how that gets structured).

The $500,000 is described not as a profit but as a “payment” to cover expenses related to performing due diligence on the funds and their investors, as well as details related to the terms and structures of individual deals. Sources say this is not unreasonable on its face, considering the laborious legal and financial work that’s gone into creating the NFL PE investment policy . But it serves a political purpose, too -- however small, it’s a sweetener for owners who have no intention of tapping PE.

It’s also a vivid illustration the NFL’s leverage.

Onstage at SBJ's Dealmakers conference this week in D.C., Ares Management Partner Mark Affolter gave a fascinating answer about the NFL’s desirability (and by extension, its leverage.) He actually mentioned the NFL’s stability first, not its future growth prospects.

“We're very focused on downside protection and value that, sometimes over, more, say high octane growth types of opportunities,” he said. While not dismissing the growth potential as the league looks overseas and strategizes around a longer season and new media deals, he said: “You can almost look at an NFL team and with a high degree of certainty, be able to predict what its cash flow and EBITDA is going to look like five, six, seven years down the road,” he said.

Incidentally, there’s growing pessimism about any PE deals getting done this calendar year, lending weight to Chiefs owner and finance committee chair Clark Hunt’s cautionary comments at the Oct. 15 league meeting . The contracts formally approving Sixth Street, Ares Management, Arctos Partners and the consortium of Blackstone, Carlyle, CVC, Dynasty Equity and Ludis are still not done.

The next NFL league meeting is set for Dec. 10-11 in Dallas. If not done there, most expect any PE deals to be ready for the league’s big offseason annual meeting in March.

Pistons owner and Platinum Equity founder Tom Gores’ deal to acquire 27% of the Chargers closed today, sources say. This means disgruntled Spanos sister Dea Spanos Berberian has fully exited. Control owner Dean Spanos -- as well as Michael Spanos and Alexis Spanos Ruhl -- now all each own 24%. 

This week, Bloomberg reported on two other pending deals for parts of teams: Eagles owner Jeffrey Lurie in talks with the family of tech titan Susan Kim , and Bills owner Terry Pegula in talks with Arctos Partners .

Three years after first getting commercial rights in Germany, the Panthers are finally playing there Nov. 10. They’re leveraging one of the main reasons they like Germany to begin with -- the numerous German companies with major operations in the Carolinas.

Stuttgart-based Daimler Truck, a Panthers sponsor, has three offices in North and South Carolina, and it will activate heavily around Giants-Panthers in Munich. In conjunction with the Panthers, Daimler Truck will bring 70 U.S. military members and their families from the Edelweiss resort to Allianz Arena to watch the game. Also, Daimler Truck will park a Panthers co-branded freight liner on Munich’s Odeonsplatz square. 

The Panthers will also bring about 50 domestic sponsors to Germany next Wednesday, and they’ll entertain them with tours and a VIP dinner. Participants include Bank of America, BlueCross and Blue Shield of North Carolina, Atrium Health and Bojangles. The Panthers’ German territory sponsors include Pizza Hut, Dr Pepper and Mars Wrigley, and they’ll be leveraging the first game with VIP hospitality and other tactics unavailable until now.

The big industrial concerns with German and U.S. operations are not typically big sports spenders, noted Dan O’Neill, VP/partnerships and premium at Tepper Sports & Entertainment. “But they do want to recruit and retain employees and be active in the community, and that’s an opportunity where we’re going to continue to pursue the German markets,” he said.

Meanwhile, the Giants’ rights in Germany are only about seven months old, requiring a “very fast learning curve” to make the most of the game, said Jessica Slenker, SVP/sponsorships. Coincidentally, she said, several key Giants sponsors will have people already in Germany on business and they’ll be entertained, including at a private cocktail hour.  

The Giants are focusing on cultural exchange, leaning into New York’s global status as a cultural hub. In September, they brought five prominent online influencers (for instance, Moritz Hau ) to NYC and MetLife Stadium for a weekend of content creation. Next week, the Giants will open Giants House on Prater Island in Munich, emphasizing N.Y.-inspired food and music alongside tailgate games, a 100th season exhibit and legend appearances.

“We have a fully integrated plan,” said Nilay Shah, SVP/marketing and brand strategy. “The idea is how do we make this connection of New York and Germany, from the cultural aspect?”

Before Commanders LB Bobby Wagner represented himself, his agent told him to forget about his dreams of wearing Jordan Brand in a sponsorship deal. Not satisfied, Wagner and his brother crashed a party at the 2016 NBA All-Star Game and proceeded to distract security just long enough for Wagner to get to Michael Jordan. “He knew who I was,” Wagner said. “He said he liked my game or something like that.” 

Wagner continued: “So when I walked away from the conversation, the first thing I thought was, ‘If the guy that makes the shoes likes me, why I can't be with them?’ So I went straight to the people and I was like, ‘Yo, I just talked to the head guy. He said he wants me to be with Jordan.’ And then they offered me a contract after that.”

Wagner told that story onstage at SBJ's Dealmakers conference this week as part of a far-reaching conversation about his off-field interests. He’s pursuing an MBA at Howard, is a backer of the Cultural Leadership Fund (a venture fund for Black investors that targets Black founders) and invested in Tonal, Therabody and Denali Technologies before its IPO.

Boldness also got Wagner connected with former Nike Brand President Charlie Denson, and through Denson, he got to former Starbucks CFO and venture capitalist John Connors. Once in the Seahawks’ locker room, Wagner heard teammates Richard Sherman and Doug Baldwin talk about their uniquely valuable connections they had as Stanford alums. Jealous, Wagner said to himself: “Man, Utah State has to have somebody.” He tracked down Denson and pretended to have plans to be in Portland, Ore., and drove 3 hours to meet him. “We had a great conversation,” Wagner said.

The idea, Wagner said, was to figure out what might be next -- long before he retired. “You typically retire around 35, and 35 is still really young,” said Wagner, 34. “And so your goal should be: How many doors can you open up in whatever profession that you're in to make that transition as easy as possible?”

• Haslam Sports Group this week unveiled District 46 at CrossCountry Mortgage Campus, a more than 16-acre development around the Browns’ existing practice facility and team HQ in Berea, Ohio, reports SBJ's Bret McCormick. The privately funded project, which is separate from the Browns’ pursuit of a new stadium in Brook Park, will cost more than $150 million and is expected to break ground in spring and be completed in early 2027.

• As part of a leaguewide deal with the NFL, Cosm will produce and show "Thursday Night Football" (Prime Video), "Sunday Night Football" (NBC) and "Monday Night Football" (ESPN) games -- as well as select matchups on Fox -- in its immersive venues through the remainder of the 2024 regular season, reports SBJ's Rob Schaefer.

• Matt Selman, showrunner of "The Simpsons," told my colleague Joe Lemire that the decision of getting involved with ESPN’s "Monday Night Football" alt-cast was pretty simple. “I just say yes to stuff,” Selman said, name-checking other projects ranging from video games to movies and theme parks. That list now includes an animated NFL game between the Bengals and Cowboys on Dec. 9, streaming on ESPN+ and Disney+.

• Monday was a tight race between Dodgers-Yankees World Series Game 3 and the Giants-Steelers “Monday Night Football” game, and the winner in terms of viewership depends on who you ask, writes SBJ's Austin Karp.

• Little Caesars’ multiyear deal to be the NFL’s official pizza sponsor has proved to be effective for the Detroit-based chain, as it leverages the league’s massive fan base to boost sales across the country and expand brand awareness, notes SBJ's Irving Mejia-Hilario.

• SBJ this week listed the 25 sports studio shows that are driving conversation and turning their stars into household names, and on the list are CBS' "The NFL Today," "Fox NFL Sunday," "NFL Live" on ESPN, NBC's "Football Night in America" and NFL Network's "Good Morning Football." In terms of shows on the rise, SBJ's Mollie Cahillane listed Prime Video's "TNF Tonight" pre-game show as one to watch.

• In the NFL, teams such as the Jaguars and Lions won’t be hosting voters at their venues on Election Day, but instead are using tailgates outside their stadiums for education as well as checking voter registration status, notes Mejia-Hilario. Meanwhile, the Colts and Seahawks and many more have chosen to record and post PSAs featuring their star players on social media and in some cases, throughout games, which encourage fans to register to vote. 

• The NFL said all 32 of its teams offered the use of their stadiums to state election boards and that 21 of them will be used in some capacity, with the additional sites being used for voter registration only. Four of the 31 NFL teams that responded to SBJ said their stadiums will serve as Election Day polling sites, with the Cowboys’ AT&T Stadium in use for the first time.