Dallas Cowboys owner Jerry Jones may look to free up capital to invest in AT&T Stadium or his other investments like Comstock Resources.

The NFL is looking into whether allowing private equity firms to invest in its franchises would be beneficial to the league. It’s an audacious move that would allow millions of dollars to flow into the pockets of owners to free up capital and bring in a new group of individual minority owners.

Industry experts think the Dallas Cowboys along with its owner, billionaire Jerry Jones and his family, may stand to gain the most with private equity’s presence.

A collaboration between the two would lead to more liquidity for the Cowboys and Jones, potentially bringing upgrades to AT&T Stadium and additional investments into Jones’ other businesses like Comstock Resources.

While leagues like the MLB, NBA, NHL and MLS have warmed to institutional wealth in team ownership over the past five years, the NFL is the last major U.S. sports league that hasn’t given in to private equity investment.

But in May, a committee of NFL owners reportedly moved one step closer to allowing private equity investments in NFL franchises. Commissioner Roger Goodell expects the league to have more to say by October.

“We didn’t ask for a vote, but I think it’s fair to say that [team owners] agree with the direction we’re going,” he said after a meeting in mid-May. “It’s been well thought-out. The committee has worked incredibly hard, and I think they have a great appreciation for that, and as such, have great confidence in their work.”

Representatives from the Cowboys, like Jerry Jones and executive vice president Stephen Jones, were unavailable at the time of publication. Still, private equity is something Jones has said the NFL must proceed carefully with.

“You’ve got to look around the corners, see what the consequences might be,” he said to reporters after an owners meeting in May. “We’re pretty proud of the way we govern the NFL at this particular time.”

Irwin Kishner, co-chair of the Sports Law Group at Herrick, Feinstein LLP, has represented the Cowboys for nearly 20 years in connection with the team’s outside investments in other properties. To him, private equity and the NFL are a seamless match.

“I think this is actually a natural evolution of [the] use of private equity dollars,” Kishner said. “I think, with the right mindset, the right partners, it makes a lot of sense. It provides liquidity, an ability to finance purchases, ownership, expansions, new buildings, new arenas [and] enhances the fan

experience.”

What is private equity? Why has the NFL resisted it?

Private equity describes the purchase of a company’s stake as an investment. Private equity firms manage those investments in companies for approximately three to five years with the goal of eventually turning a profit and cashing out.

The NBA, NHL, MLB and MLS opened the doors for private equity investments beginning in 2019. It’s brought at least $200 billion to the owners of more than 60 teams, including the 2023 World Series champion Texas Rangers, according to Pitchbook.

Since then, sports-focused private equity firms have begun popping up, like Dallas-based Arctos Partners and New York-based RedBird Capital, neither of which responded to an interview request from The Dallas Morning News.

Each has invested over $4 billion into sports teams like the Golden State Warriors and the Boston Red Sox.

Historically, the NFL hasn’t needed private equity firms and has clung to its strict ownership rules which require a team to have a priority owner with a minimum 30% stake.

But the average team valuation reached $5.1 billion in 2023, a 14% increase from 2022. In 2010, the average team was valued at $1.02 billion, 400% less than today.

It means the NFL has a small pool of potential owners who can foot the bill for a team.

“I think the NBA did the right thing by allowing [private equity]. I voted to allow it,” said Dallas Mavericks minority owner Mark Cuban. “The numbers are getting so big to buy teams the number of potential buyers is relatively small.”

Jones bought the Cowboys for $150 million in 1989. Today, the team is valued at over $9 billion, more than any other team in the world including the MLB’s New York Yankees and the Champions League Real Madrid, valued at $7.10 billion and $6.07 billion respectively.

How would private equity impact the NFL, Cowboys?

Private equity in the NFL would free up capital for owners whose net worth is dependent on their teams. It would allow owners to transition their investments to renovating or building new stadiums and arenas, which taxpayers have paid over $4.3 billion for since 2000.

A drawback for investors is that private equity firms would likely have no say in personnel like free agency signings or trades. Still, getting involved with an NFL team will be too prestigious and profitable for some to pass up, said Carrie Potter, sports finance lecturer at Rice University.

“It’s all about profit. There would be a very clear, defined structure going in,” she said. “It’s a huge asset to have in your portfolio. It’s a very attractive position to be a minority owner in a professional sports team, especially a coveted team like the Cowboys.”

The tradeoff for fans may end up becoming ticket prices. Cowboys home games already cost an average of $331 per ticket.

If AT&T Stadium receives more investments should Jones sell a stake of the team, price increases will probably follow, said Ken Wiles, executive director of the HMTF Center for Private Equity Finance at the University of Texas.

“If you increase the services, make the stadiums nicer, you’ll increase demand,” he said. “You’re going to drive up prices, and it’s already very expensive.”

But it’s unclear if Jones, who already has a net worth of $12.6 billion, would utilize private equity.

His already large personal capital means he doesn’t necessarily need a cash injection, said Robert Covington, founder and managing partner for Dallas-based private equity firm Braemont Capital Management and former partner at RedBird Capital.

“I’m not sure Jerry Jones has any need or desire … to have private equity investment, not because it’s a bad idea for the league, he just doesn’t need it,” Covington said. “There’s other ways for him to execute development plans or other things without selling the team.”

Jones already draws millions of dollars from Cowboys merch and his other investments like Comstock Resources Inc., Blue Star Land and more. But a private equity investment in the Cowboys would mean Jones would have more liquidity to pump back in his non-sports-related businesses.

Most importantly, additional liquidity for Jones means he could invest more in AT&T Stadium and promote his Arlington crown jewel, dubbed “Jerry World,” back into the league’s top stadium. It was built in 2009 for $1.3 billion.

Though it’s still an advanced facility and is receiving a $350 million investment ahead of the 2026 World Cup, other bigger and more expensive stadiums have since been built. Inglewood’s SoFi Stadium cost $5.5 billion and Nashville’s New Nissan Stadium is expected to cost $2.1 billion when it’s completed in 2026.

“There’s pushback on public funding for stadiums nowadays,” Wiles said. “I think Jerry Jones absolutely would use this to help build that franchise because that stadium is so much more than just an NFL home. It is part of the iconic identity of the Dallas-Fort Worth metroplex.

“Plus, the better it is, the easier it is to sell for future events like a Super Bowl, WrestleMania and World Cup. It could ensure the Cowboys maintain the facility at the top.”

But Covington doesn’t see what’s stopping Jones from the kind of innovation and development he’s already accomplished in his decades owning the Cowboys, calling him a “trailblazer” in running his team like a business.

“I think if he wanted to go do some massive development like he did with The Star related to the stadium, he could absolutely seek out partners to do that,” Covington said. “But let’s be clear, he’s already done that.”

Still, even if Jerry Jones does not participate in welcoming private equity investment in ownership of the team, their family could still benefit from the change. If other teams see an increase in value, the Cowboys will follow suit, said Richard Alm, a writer-in-residence for the Bridwell Institute for Economic Freedom at Southern Methodist University.

“I think long term, it’ll just inflate franchise values even more,” he said.

What’s next?

The proposed change to the league’s ownership rules was postponed in May, citing a need for a more cautious approach. The next owner’s meeting will take place in October. By that time, another vote will likely be taken where it will need 24 of 32 owners to agree on its passing for it to be finalized.

Because of the money it could bring owners like Jerry Jones and even those in small markets, October could bring the beginning of private equity in the NFL, Kishner said.

“As quickly as ownership wants to allow it to happen, it’s going to happen,” he said. “I think professional sports investing at the right underwriting is a very profitable way of running a business. And I think that this is going to be something that should be met with immediate welcome.”

Time will tell how or if Jerry Jones and the Cowboys respond. But what’s clear is that the NFL’s next chapter will bring with it lots of success and most importantly, heaps of money.

“I think that the league is on a trajectory that is brilliant. They have the fan experience, there’s demand for their media rights, they’re expanding beyond the U.S., even Taylor Swift is adding something,” Rice’s Potter said. “This is just going to keep them skyrocketing financially.”

Regardless of the position the NFL takes with private equity, the Jones family will likely always have a seat at the table.

“I don’t think fans necessarily care who owns the team or who the minority investors are. I think they want their teams to win,” Alm said. “Cowboy fans will still have Jerry Jones to grouse about because he’s going to continue to run this team.”