National Football League (NFL) owners have approved the sale of minority stakes in the Los Angeles Chargers, San Francisco 49ers, and Cleveland Browns as more franchises look to boost their value.
US-based private equity firm Arctos Sports Partners has acquired an 8% stake in the LA Chargers, joining the Spanos family and Tom Gores, owner of the NBA’s Detroit Pistons, in an expanded ownership group.
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The Spanos family has owned the Chargers since 1984, when Alex and Faye Spanos bought the team. Dean Spanos, the eldest son of Alex and Faye, has run the Chargers since 1993.
In a statement, Dean Spanos said: “We’re extremely pleased to welcome Arctos to the Chargers family as a limited partner.
“Arctos’ track record in major professional sports speaks for itself, and we are grateful for their alignment going forward during this time of tremendous growth for our organization.”
The sale comes after the Spanos family sold a 27% stake in the Chargers to Gores last year, settling a long-running financial dispute between Dean Spanos and his sister Dea Spanos Berberian.
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By GlobalDataIn 2021, Spanos Berberian sued her siblings to force a sale of the family trust first established in 1998 and filed another suit in 2022, accusing Spanos of “breaches of fiduciary duty.” Neither suit proceeded to trial.
The sale of stakes to Gores (27%) and Arctos (8%) has left Dean Spanos and siblings Michael and Alexis with a 61% share in the franchise, while another 4% is owned by non-family members.
Arctos, meanwhile, adds the LA Chargers to a growing list of sports team investments, including the Dodgers and Chicago Cubs in Major League Baseball, the NFL's franchise Buffalo Bills, NBA basketball’s Golden State Warriors and Sacramento Kings, and NHL ice hockey’s Pittsburgh Penguins and New Jersey Devils.
NFL owners also approved the sale of a 6.2% stake in the San Francisco 49ers to three investor groups at an $8.5 billion valuation – the highest ever for a sports team.
Based on the valuation, the price paid by the three new investors was $533.2 million.
Billionaire Vinod Khosla has bought the largest stake, while the families of Byron Deeter, a partner at Bessemer Venture Partners, and Will Griffith, founding partner at Iconiq Growth, have also joined the ownership group.
Jed York and his family still own 91% of the 49ers after first acquiring the team in 1977 for $13 million.
Meanwhile, Charles Woodson, the former Oakland Raiders and Green Bay Packers defensive back, had his purchase of a 0.1% stake in the Cleveland Browns approved.
The stake sales come after NFL franchise owners voted to allow the entry of private equity into NFL ownership in August, although only a small list of private equity firms. These companies, of which Arctos is included, are only allowed to buy stakes of up to 10% in NFL sides and are prohibited from intervening in club operations.
Other private equity groups approved to invest in NFL teams include Ares Management, Sixth Street Partners, and a consortium of Dynasty Equity and Carlyle Group Inc.
Alongside the 10% cap, other regulations include each purchase being held for a minimum of six years, each fund being able to invest in a maximum of six teams each, and no more than 20% of a fund being allocated to any one NFL franchise.
Private equity was voted in to allow the league’s owners to benefit from minor stake sales as the valuations of NFL franchises skyrocket, reducing opportunities for these owners to sell up entirely.
