NFL to green light PE deals in Buffalo, Miami; new details on Buffalo LPs emerge

A group of business executives with ties to the state of New York have a deal in place to buy 10.6% of the Bills alongside Arctos Partners, sources said, which will take 10% of the team if NFL owners approve the deal as expected.

Both the Bills’ proposed transaction and the Dolphins’ plans to sell 10% to Ares Management — the first two deals permitted under the NFL’s new policy allowing institutional investment in teams — are on the agenda for Tuesday’s NFL finance committee meeting, indicating a high probability of winning final approval from owners in December.

According to sources, the Bills buyers not previously known are:

• Rob Palumbo (5.6%), co-managing partner of the private equity firm Accel-KKR
• A group led by Theresia Gouw (2%), co-founder and managing partner of the venture firm Acrew Capital;
• Sue McCollum (1.7%), CEO/owner of alcohol distributors Eagle Brand Sales and Double Eagle Distributing.
• A group led by Tom Burger (1.4%), the co-founder and managing partner of Gridiron Capital. Burger’s group includes a trio of retired athletes who played in nearby Toronto — Jozy Altidore, Vince Carter and Tracy McGrady — whose pending purchase of Bills stakes had previously been reported by Sportico.

Alongside Ares in Miami, Nets co-owner Joe Tsai will buy 2.9% of the team, and Nets minority owner Oliver Weisberg will by 0.1% of the team.

Financial terms are not known, but CNBC recently valued the Bills at $5.35B and the Dolphins at $7.1B. Bloomberg, which first reported the talks between the Bills and Arctos and the Dolphins and Ares, said the Dolphins and other assets held by Ross were being valued at $8.1B.

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Closing these PE deals by year-end had always been those teams’ hopes, but in recent weeks, league and finance insiders had doubted they would be done in time. Their skepticism stemmed from the extended timeline in finalizing the long-form documents allowing the PE funds to do business with the NFL.

But the NFL now says those detailed documents are done, sources say, at least for Arctos, Ares and Sixth Street. Documents permitting the Ludis Group — the consortium of Blackstone, Carlyle, CVC and Dynasty — are not yet done.

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In both Buffalo and Miami, the deals mark their majority owners’ first major divestment of equity. In Buffalo, the deal will leave Terry Pegula with about 79% of the team. In Miami, principal owner Stephen Ross will still control 84.5% of the team.

The Bills issued the following statement: “Earlier this year, the Pegula family retained Allen & Company to explore the potential sale of a non-controlling, minority interest in the Bills. Since then, there has been a significant amount of interest, and our focus has been on finding the right partners for our organization. The process is on-going, and any potential investor cannot be confirmed or finalized until it is approved by the NFL.

“The Pegula family’s continued commitment to our fans across this region and beyond, Western New York, and the new Highmark Stadium remains unchanged. Neither the team nor the Pegula family can comment any further at this point.”

The other entities declined comment or could not be immediately reached.

The projected cost of the Bills’ new stadium has jumped to $2.1B, with Terry and Kim Pegula responsible for picking up the cost overruns, the AP reported last week. However, Bills President Pete Guelli told the AP that the potential sale of a minority share of the team is “not connected to increased construction costs.”