IRVING, Texas. — For the first time in NFL history, private equity firms have bought into league ownership. NFL owners voted to approve private equity firm Ares Management’s bid to purchase a stake in the Miami Dolphins along with private equity firm Arctos Partners and private equity firm Gridiron Capital’s bids to buy into the Buffalo Bills at the special league meeting Wednesday.

Ares Management purchased 10 percent of the Dolphins, the team announced after the vote. Brooklyn Nets and New York Liberty owner Joseph Tsai also purchased three percent of the Dolphins. In total, 13 percent of the Dolphins’ shares were sold. According to Bloomberg, the Dolphins’ stakes were sold at a valuation of $8.1 billion. Dolphins owner Stephen Ross will remain the controlling owner.

Miami Dolphins, Stephen M. Ross announce sale of limited interest to Ares Management for continued investment into South Florida

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— Miami Dolphins (@MiamiDolphins) December 11, 2024

Arctos Partners purchased 10 percent of the Bills. Gridiron Capital managing partner Tom Burger purchased 1.4 percent of the Bills as a part of a consortium group that’ll collectively acquire 10.6 percent of the franchise. The consortium group includes former NBA players Tracy McGrady and Vince Carter and MLS player Jozy Altidore. Overall, 20.6 percent of the Bills’ shares were sold. Terry and Kim Pegula will remain the controlling owners.

Per a team source, the Bills’ valuation was set at $5.8 billion, including debt load, for the sale. According to another team source, the sale of their shares at $4.5 billion netted a return of $927 million.

In August, NFL owners voted to allow private equity funds to purchase up to a 10 percent stake in a franchise. At least a 30 percent stake is required to be a controlling owner of a franchise, so there won’t be a situation where a private equity firm runs an NFL team. The significance to NFL owners is it could make it more practical for them to sell portions of their teams to become more liquid as franchise values continue to increase rapidly.

The NFL vetted the private equity firms that are allowed to buy into teams. Sovereign wealth funds and pension funds are not allowed to invest in NFL teams directly, but they are allowed to be investors in overall private equity funds that do.

Private equity funds that buy into teams have to hold their shares for at least six years. The thought process is it will prevent them from quickly flipping their shares in teams for profit. NFL teams are capped at having 25 members of their ownership group, which includes the controlling owner.

Why Pegula sold stake of Bills

Despite facing massive stadium cost overruns and an NHL team that has been hemorrhaging money for over a decade, Bills owner Terry Pegula on Wednesday said he hasn’t given a thought to what he’s going to do with the money raised by selling 20.6 percent of his football club.

“I haven’t thought about that,” Pegula told reporters after the league approved the sale of minority stakes. “I really didn’t do this to raise money, although you’re glad you raised the money.”

Pegula took questions from reporters for the first time since the 2019 NFL spring meetings and a 2020 video conference with hockey reporters after hiring Sabres general manager Kevyn Adams. Pegula was asked no Sabres questions Wednesday.

He said his motivations to sell were to get more women involved in Bills ownership after his wife, Kim Pegula, suffered a debilitating heart attack in June 2022, and as part of the team’s strategy to do more business in Toronto, a 100-mile drive north up the QEW.

“I just wanted to have some partners to help us grow,” Pegula said. “The three pro athletes are all icons in Toronto. That’s our market. We’re going to grow into that market. They know that. I’ve asked them about that, and they’re willing to help.”

Pegula was referring to retired Toronto Raptors legends Carter and McGrady and former Toronto FC star Altidore. The front office wants to try Canada’s largest city again after its Bills in Toronto Series was a fiasco under Ralph Wilson’s ownership. The Bills played home games there from 2008 through 2012 before discontinuing the agreement one year early over lack of interest.

Two of the new stakeholders are beverage executive Sue McCollum and entrepreneur Theresia Gouw, both of whom grew up in suburban Buffalo.

“One of the things that I wanted to accomplish also was to bring in some women,” Pegula said. “We’ve got two female investors that are very successful business people, and I’ve got three daughters that are involved in the team, hopefully, more so in the future. I think that’s a good thing for them to learn some business acumen and have some female input because when Kim went down that was a big loss of influence on my daughters. As far as the business side goes, she’s unable to be involved.”

Pegula also commented on the Bills’ recently raising their stadium cost estimate to $2.1 billion. When the stadium’s deal was announced in March 2022, the original price was $1.4 billion, with New York contributing $600 million and Erie County $250 million. Pegula is on the hook for all overruns.

“Stadium costs are over budget,” Pegula said. “We’re on time, so that’s under budget. But you know, in today’s world, anybody who’s building anything will tell you they’re over budget because of inflation, the aftereffects of COVID and supply chain and all that kind of stuff. Increased costs are part of the business.

“We’ve actually built a stadium at the worst possible time over the last 30 years.” — Tim Graham, senior Bills writer

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