NFL changes ownership rules

October 30, 6:57 AMSports Business ExaminerJosh Lobdell

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No other American sports leagues have as many rules for its owners as the NFL does. NFL owners are not allowed to own other sports franchises; the only exception to that rule was when the league let NFL owners purchase Arena Football teams in their own markets.

The NFL also had rules about how much of a percentage the general partner, or lead partner had to own in a team. Before 2004 the lead partner had to own 30% of the team, in 2004 that stake was reduced to 20% for the lead partner and at least 10% by the lead partner’s family.

Now the NFL has essentially flipped that ratio. Under the new rules lead partners will have to own 10% of a team with an additional 20% owned by their family.

The NFL found it necessary to change the rules given the fact that many NFL team are worth more or very close to a billion dollars. These new rules will also help the current crop of owners, who are pretty old on average, transfer their teams to new ownership groups with their family installed as the lead owner.

Since there are many family run operations in the NFL, where the lead partner’s family is actually employed by the team, the league feels this rule change is necessary to move the team to new ownership smoothly should anything happen to the current owners.

The recent troubles with the Pittsburgh Steelers also made these rule changes necessary. The Rooney Brothers each inherited 16% of the team when their dad died in 1988. Since some of the brothers owned race track they ran afoul of NFL gambling rules and a new ownership structure had to be negotiated. The Steelers ownership structure was grandfathered in, as that situation has developed before the 2004 rule changes.

In the end Dan Rooney ended up with 10% of the team, and his son Art now controls 20% of the Steelers. The sale of the Steelers almost lead to the Rooney family selling off the team, and the league wanted to change the rules to prevent long time ownership groups, like the Rooney family, could more effectively get their ownership structures worked out.

The NFL requires a high ownership percentage for their lead partners to avoid syndicate ownership problems like those found currently in the NHL and the MLB. This league wants the ownership box to speak in one voice.