Robert Kraft, owner of the New England Patriots has cut a deal. He has agreed to sell an 8% minority stake in the team to two investment groups. With this agreement, the Patriots are estimated to be worth just shy of $9 billion. That’s quite the increase from the $172 million Kraft purchased the franchise for in 1994! New buyers are led by Sixth Street Capital and Dean Metropoulos, both purchasing a stake in the team’s ownership.
In the deal, Sixth Street Capital is buying an estimated 3% of the Patriots and Metropoulos will take an even bigger 5% stake. Combined with the cash reserves the team already has, the sale should produce a more stable balance sheet. This increase further adds to the strong financial underpinnings of the franchise. Perhaps not surprisingly, the post-money valuation of the Patriots is well north of $9 billion – a testimony to their robust market presence.
Just this month, for example, the New England Patriots got a jaw dropping $9.25 billion valuation. This extraordinary number makes them fifth in the entire National Football League (NFL) among all 32 teams. This staggering valuation highlights just how profitable the team’s brand is and their winning trend in the league has been. The league’s finance committee is preparing to meet to approve two new minority stake sales. These transactions are expected to be voted on during their October meetings.
If the New York Giants sold just 10% of their franchise, their valuation would soar to a mind-boggling $10.3 billion. By comparison, a recent sale of a 2.35% minority stake in the Chicago Bears valued that franchise at $8.9 billion. These numbers present both a competitive landscape for NFL franchises and the growing value of ownership stakes.
Kraft’s eventual decision to sell a minority stake in the Patriots. This latest move is part of a larger trend of NFL teams looking for minority investments. Fender-bending This strategy increases liquidity by several orders of magnitude. Most importantly, it is a resounding display of faith in the league’s continued expansion and revenue-generating success.