Rob Walton was out of the country when the news broke that he’d won the bidding war to purchase the Denver Broncos. It’s unclear if or how he celebrated abroad, but it was a hooray moment for him and also for the NFL’s 31 other owners, since the record $4.65 billion price tag—more than double the $2.2 billion price fetched by the Carolina Panthers in 2018—only increases the value of their clubs.
But as valuations for NFL franchises continue to skyrocket, the chances of the NFL welcoming its first black majority owner are becoming slimmer. There are fewer than 10 black billionaires in the U.S., according to Forbes, and even that level of personal wealth is no longer enough to ensure a controlling stake in an NFL franchise. Wealth inequality and the racial wealth gap play a large role in why many minorities are unable to reach the league’s minimum 30% equity threshold and debt limit requirement to become a controlling owner.
But African American Sports and Entertainment Group president Ray Bobbitt believes the NFL can tweak its rules to provide better opportunities, including allowing minorities to take a group economics approach. “Even if you’re a billionaire, do you have that much liquidity?” Bobbitt said of rising valuations. “At the end of the day, there has to be adjustments to the [ownership] policies to expand the league in that perspective.”
Others though believe it’s less about creating a set of rules that is more advantageous for one group but more about continuing to find ways to bring the necessary parties together. Sportscorp co-founder Marc Ganis believes the best way to achieve greater diversity among controlling owners is by starting the process before a franchise is for sale, as they typically trade roughly once every four years.
“Recruit, educate and vet now,” said Ganis, a confidant to several NFL owners. “Identify people of great wealth who would be interested in joining with and supporting prospective owners of color so they can be best prepared, organized and funded when a team is put on the market.”
Ganis mentioned Reggie Fowler, who was slated to become the league’s first black controlling owner in a deal to take over the Minnesota Vikings in 2005. The failed bid originally included current majority owner Zygi Wilf as a limited partner. The deal never materialized and Wilf stepped up to take a controlling stake as Fowler didn’t have the liquid capital to complete. But getting that close 17 years ago provides a shred of hope that with the right amount of wealth — and perhaps more importantly, the right relationships — one day there will be an owner who shares the same skin color as 70% of the league’s players.
Some black bidders surfaced during the Broncos’ sale process. Media mogul Byron Allen reportedly considered an offer; erroneous reports said Vista Equity Partners founder and Denver native Robert Smith was interested. Until one of nation’s black billionaires commits, or the league’s ownership rules are altered in favor of minorities, the best route to entry may be starting as a limited partner.
“We have to create an atmosphere of inclusion, and that’s difficult to do when you have 32 privately-held companies, which may not agree with the avenue for more minorities to be involved in ownership,” said United Beverage Company president Deron Cherry, who became the NFL’s first black limited partner in a team when he bought a stake in the expansion Jacksonville Jaguars in 1993.
The former Kansas City Chiefs star believes more representation within ownership groups can lead to identifying more diverse prospective buyers who have the wealth to become majority owners. But like all NFL limited partners, one must be invited to join the group.
“[Diversity within ownership groups is] certainly something that the league is supportive of. When we’ve had prospective transactions, we’re really encouraging the selling franchises to ensure that the new ownership group includes minority representation,” Chiefs CEO and chairman Clark Hunt said at the NFL spring owners’ meetings. “When you look at the history of the league, there’s a lot of controlling owners who came in as minority owners first. That’s a really smart, logical step that hopefully over time will diversify the ownership room.”
Pending league approval, Ariel Investments co-CEO Mellody Hobson will be the next minority to have limited ownership status in the NFL, as part of the Broncos’ new ownership group. She will join a small group of black limited partners in the NFL, which includes former players Warrick Dunn (Atlanta Falcons) and John Stallworth (Pittsburgh Steelers). It’s unclear if the Starbucks board chair wants to stay in her limited partner role long-term or if she aspires to become a majority owner (her husband, filmmaker George Lucas, is worth more than $5 billion).
Each of the three main finalist groups for the Broncos included a minority, including Magic Johnson and Clearlake Capital co-founder José Feliciano. The NFL declined to comment on if it viewed the sale as a success in its push for diversity since the transaction still needs to be approved by a majority of owners (though no hiccups are expected).
The reality remains that even purchasing a limited stake is becoming more expensive, which makes getting in the door more difficult, especially since part owners don’t usually see returns until the team sells years or sometimes even decades later.
“If they’re serious about increasing diversity in ownership, then there has to be more flexibility in what is required to achieve the threshold necessary to become an owner,” sports law professor Jeremi Duru said. “That will only be more important as the valuations continue to increase.”
More diversity among NFL owners could also help increase the number of minority head coaches and general managers, which the league is trying to address with the creation of its new accelerator program. Falcons owner Arthur Blank addressed the media during the program last month and championed the importance of improving diversity within leadership roles in the NFL. More black and brown faces at the table would increase the odds for minority candidates and put more pressure on owners during the screening process.
“We have to find some other ways to work this out, because the current situation is not working,” Cherry said.