The Pegula family has decided to sell a minority stake in the Buffalo Bills, according to a report by Tim Graham of TheAthletic.com. While the specific percentage of the team up for sale has not been disclosed, reports suggest it could be around 25 percent. The family has enlisted Allen & Company to explore potential buyers and emphasize that Terry Pegula and the family will maintain control of the team.
The decision to sell comes as a result of the rising value of NFL teams and potential estate taxes that could impact sole ownership. Forbes estimated the Bills’ value at $3.7 million in August 2023, significantly higher than the $1.4 billion Terry and Kim Pegula paid in cash to acquire the team in 2014. Recent sales in the league, like the Commanders going for $6.05 billion, have further highlighted the rising values of professional football franchises.
However, due to league regulations, owners are prohibited from selling limited partnership stakes to private equity firms, limiting their options for raising capital. This has made it difficult for teams to invest in their operations and facilities without taking on significant debt or risking losing control over their franchise entirely.
The construction of a new stadium for the Bills is another factor that may have influenced this decision. Initially projected to cost $1.4 billion, construction expenses could climb closer to $2 billion if there are any overruns beyond state and county contributions. Despite this potential sale of part ownership, Terry Pegula remains committed to Western New York and his other sports franchises while keeping his family’s commitment intact.
No further details about this sale are currently available at this time.
In conclusion, it is clear that selling a minority stake in an NFL team can be a complex process with many factors at play, such as rising values and increasing estate taxes for sole owners. However, by working with professionals such as Allen & Company and maintaining control over key decisions such as stadium construction costs, families like the Pegulas can make informed decisions about how best to manage their teams’ finances while still providing fans with quality entertainment and support for local communities.
Overall, it’s important for sports organizations like NFL teams to carefully consider all options before making major decisions about ownership or investments in their franchise’s future success – especially when it comes to maintaining community support and financial stability through strategic partnerships or sales agreements with outside investors or entities.