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Cardozo Law Review

Abstract

In August 2024, the National Football League became one of the last major North American sports leagues to permit private equity investment in its member teams. The league’s new bylaws, however, impose significant restrictions on this investment: only six pre-approved private equity funds may invest, each purchase is capped at a ten percent equity stake, and all investments are subject to a minimum six-year lock-up period. While these restrictions reflect the league’s understandable caution about outside influence, they may have inadvertently created a significant antitrust problem. This Note argues that the NFL’s private equity bylaws constitute an unreasonable restraint of trade in violation of Section 1 of the Sherman Antitrust Act. Drawing on the Supreme Court’s landmark decision in American Needle v. National Football League, which rejected the single-entity defense for the NFL and subjected the league’s concerted actions to antitrust scrutiny, this Note applies the Rule of Reason framework to analyze the competitive effects of the league’s exclusive investment arrangement. It contends that the thirty-two member teams, as independent centers of economic decision-making, engaged in concerted action when they collectively voted to restrict the private equity investment market to a handful of approved funds, thereby creating a marketplace for competition and then unreasonably constraining it. This Note further argues that the relevant market for antitrust analysis is the submarket for rapid, debt-financed private equity investment in NFL franchises, a category of investment that is economically distinct from traditional individual investment given its unique capital structure, liquidity profile, and return-driven motivations. Within this submarket, the exclusive arrangement produces meaningful anticompetitive harm: it reduces team owners’ negotiating leverage, limits the capital available to cash-flow-poor franchises, and disproportionately disadvantages small-market teams that most need competitive investment to remain viable on and off the field. To cure these deficiencies, while also preserving the league’s legitimate interest in maintaining investment standards and competitive balance, this Note proposes that the NFL abandon its favored-fund system entirely and replace it with a tiered lock-up structure that calibrates holding periods to investment size. This approach would open the private equity investment market to all qualifying funds, enable broader capital access across franchises of varying market sizes, and bring the league’s bylaws into conformity with Rule of Reason principles.

Disciplines

Antitrust and Trade Regulation | Entertainment, Arts, and Sports Law

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