Private-equity investors, I know you’ve heard this before, but I have a great investment opportunity for you.
I’ve never worked a day in finance, and I’m arguably closer to the NBA than an MBA, which is saying something considering how bad my jump shot is. But hear me out.
I understand the most basic principle in investing: Buy low, sell high. And I’ve got an asset that would consider the Mariana Trench a step up.
My beloved New York Jets.
Your immediate reaction might be to laugh (most people do when I tell them I’m a fan). But the NFL has finally opened its doors to institutional investors, and PE firms are rushing to get a piece of the action.
The New England Patriots, San Francisco 49ers, and New York Giants got the green light from the NFL to receive outside investments this week. For the Giants, the deal reportedly valued the Jets’ MetLife Stadium roommates at a whopping $10.3 billion. The Pats’ ($9 billion) and Niners’ ($8.6 billion) valuations weren’t anything to sneeze at either.
Admittedly, it won’t be a bargain. CNBC has the Jets’ valuation at $9.1 billion, which ranks them sixth-highest in the league. Forbes has the Jets slightly lower at $8.1 billion. It’s tough to say the price tag definitively, but being based in the largest US city likely means it comes with a nice premium.
Meanwhile, the Jets are 0-7 this year with a real shot at finishing 0-17, which would be the worst season in NFL history. They’re tied with the Buffalo Sabres for the longest active playoff drought — 14 seasons — across the four major US professional sports. (At least we’re champs at something.)
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A terrible team with a high price tag. Where do I sign up?
There’s also a catch. League rules don’t allow these new investors to take more than a 10% stake, making them passive investors without voting power. (Man, I’m really doing a good job selling this.)
But getting a foot in the door will give you an edge if the league looks to raise the limit. And if the NFL does change the rules, private-equity investors are known for orchestrating massive turnarounds (or at least trying to).
Now is PE’s chance. And don’t worry about driving the team into the ground. We’re already almost six feet under.
It’s not all bad news
The Jets come with some silver linings.
Fortunately, unlike the English Premier League, the NFL doesn’t relegate teams. So, as bad as the Jets are, they get to stay in a league that’s minting money.
There are three guarantees in life: death, taxes, and the NFL getting boatloads of money to broadcast its games. The league is reportedly looking to renegotiate its media deals as soon as next year, and it’s bound to have a long list of suitors.
The money from the NFL’s TV deals is evenly split across all 32 franchises. Private equity loves recurring revenue. How about a few hundred million dollars you can bank on every year?
Jets fans are also devoted. They are committed. You have to be to cheer for a team like this. Looking for a loyal partner? Marry a Jets fan, because anyone who still roots for them definitely won’t leave you. (My wife is a Jets fan, too, so I guess we’re really stuck together.)
Just look at this poor sap after Sunday’s loss to the Carolina Panthers. (This was sent to me no less than three times in 24 hours.)
Think of the dedication they’d show to the rest of your portfolio companies! Oh, you own a business that sells water skis? I’ll buy 10 of them if you get the Jets a Super Bowl, and I don’t even own a boat.
I once had a friend stop eating Kraft products the week leading up to a game against the Patriots to protest team owner Robert Kraft. Only after the game, which we probably lost, did he realize Kraft has nothing to do with the food company he shares a name with. Stupid? Maybe. Loyal? Absolutely.
Bringing the Jets some success could also help you cut more deals. After all, if you can turn the Jets around, what company can’t you improve?
Whatever it takes, Jets nation will have your back.
Are you a PE investor looking to invest in the Jets? Are you a beleaguered Jets fan who just needs some support? Email me at [email protected].
