Miami Dolphins Sell 13% Stake to Ares Management and Brooklyn Nets Owners, Marking New Era in NFL Ownership Structure
The Miami Dolphins have recently finalized a significant financial transaction, marking a new era in the team’s ownership structure. The team’s owner, Stephen Ross, has sold a 13% stake in the franchise and other assets, including Hard Rock Stadium, to Ares Management funds and Brooklyn Nets owners Joe Tsai and Oliver Weisberg. This sale, approved by NFL owners at league meetings in Irving, Texas, sees Ares Management acquiring a 10% stake, while Tsai and Weisberg will hold a 3% interest[1][5].
This transaction is part of a broader trend in the NFL, following the league’s decision in August to allow private equity groups to own portions of its franchises. The Dolphins and the Buffalo Bills are the first teams to take advantage of this new policy, with the Bills selling a stake to Arctos Partners L.P., a private equity firm with extensive experience in sports investing[1].
The sale is significant not only for the Dolphins but also for the NFL as a whole. It reflects a growing interest in sports investing among private equity firms and institutional investors. According to the Ross-Arctos Sports Franchise Index, investments in sports franchises have returned nearly double the return of the S&P 500 since 2000, making them an attractive asset class for investors seeking uncorrelated returns[1].
Stephen Ross, who remains the chairman with an 84.5% stake in the Dolphins, expressed his satisfaction with the deal, stating that the team was fortunate to attract significant interest from multiple investors, allowing them to be highly selective in choosing partners who align with their core values and long-term vision[1].
The new investors bring a wealth of experience and resources to the table. Ares Management, for instance, has made debt and equity investments in several sports franchises, including Chelsea F.C., the San Diego Padres, McLaren Racing, and Inter Miami C.F.[1]. Meanwhile, Joe Tsai and Oliver Weisberg, as owners of the Brooklyn Nets, bring their expertise in managing a professional sports team.
This investment comes at a critical time for the Dolphins, who are facing financial challenges, including the potential departure of star player Tyreek Hill, which could result in an $88.8 million dead cap hit[3]. The influx of capital from the sale could help the team navigate these financial challenges and continue to build a competitive roster.
The NFL’s decision to allow private equity investments is seen as a strategic move to attract more capital into the league and provide teams with additional financial flexibility. However, it also raises concerns about the risks involved in sports-focused funds, including uncertainties of valuations and track records. According to Coller Capital’s global private capital barometer, 81% of surveyed institutional investors in private markets said the risks involved in sports-focused funds are too great to invest, while one-fifth of surveyed investors said they have exposure to sports, with appetite strongest among public pension funds and endowments[1].
In conclusion, the sale of a 13% stake in the Miami Dolphins to Ares Management and Brooklyn Nets owners marks a significant development in the team’s ownership structure and reflects a broader trend in the NFL towards private equity investments. The deal brings in experienced investors and provides the team with additional financial resources, which could be crucial in navigating the challenges ahead.