The vote came during an owners meeting in Minneapolis Tuesday, and marks the end of the NFL’s era as the only one of the major four U.S. sports leagues that did not allow institutional investment. The vote comes after a special committee of NFL owners put together a proposal of possible changes to the league’s ownership to allow for private equity investments.

Under the new rules, private equity can own up to 10% of a team, and investors must hold their position for at least six years.

The NFL still had some restrictions, only allowing investments from a select group of investors. The pre-approved firms include Arctos Partners, Ares Management Corporation, Sixth Street, Blackstone, Carlyle, CVC Capital Partners, Dynasty Equity, and Ludis, which is an investment company run by former NFL player Curtis Martin. 

The rules also allow the NFL to get a cut of any proceeds that a PE firm may make if they sell their stake. The PE firms approved to invest “absolutely understood and expected that the NFL would have a collective participation on this. As I said before, not all clubs will take advantage of this,” said NFL Commissioner Roger Goodell after the vote. 

Goodell said the NFL has been “very deliberate” in considering private equity. “Other leagues are doing it. We’re doing it with a cap of 10%, so it’s a much less significant position. But I think it’s an appropriate thing to give teams that liquidity and to reinvest in the game and to their teams,” he said. 

PE investors will be able to buy non-controlling limited partner interests in teams but will have no governance rights or any say in league and club operations, said Joe Siclare, an NFL EVP, who spoke during a press conference Tuesday. “We had the benefit of having a lot of interest [from] the investment community.”

The agreement Tuesday allowing PE to invest is not final but provisional, Siclare said. “There’s still work to do to finalize the agreements with all of these funds,” he said. 

When asked how the NFL chose the PE firms, Siclare noted that other leagues have allowed private equity to invest. “There’s a sort of a roster of funds out there. They’re the purpose -built funds that specifically have been built to invest in a sports franchise. And then you have, as I said before, the kind of household name, huge private equity funds,” he said. 

The NFL received much interest but wanted funds that were “ready to invest on day one,” he said. The NFL is very comfortable with the PE funds they are “going to be in business with” and don’t expect any reputational issues, Siclare said. However, he noted that the NFL has the ability to eliminate a fund “from the process in future sales if we had to take that step,” he said. 

With so much interest, more funds may be permitted to invest in the future, Siclare said. The NFL does not have a buyback provision which would allow it to unwind the deals, he said. 

A spokesperson for Ares said the firm was “honored” to have the chance to invest in NFL franchises. “The NFL has long engendered deeply loyal fanbases, innovative approaches to media and some of the most viewed and highest valued sports franchises in the world,” the spokesperson said. “We are excited for the opportunity to support the continued growth of NFL teams through Ares’ extensive investment experience and strong relationship networks in the sports, media and entertainment sector.” 

Arctos, which has several major sports investments including in the NBA’s Golden State Warriors and the MLB’s Houston Astros, expressed a similar sentiment. “Pending final approval, Arctos would be the only firm approved to invest in equity across each of the five most popular major North American leagues,” a spokesperson said.