Change in venture capital fund passes with opposition
Six NFL teams last week voted against the league’s newly announced strategic investment partnership with Providence Equity Partners, multiple football sources said, a rare sign of discord in a league where most initiatives in recent years have passed with only an occasional nay.
Washington Redskins owner Daniel Snyder spoke out against the deal when it came up for a vote at last week’s NFL annual meeting, the sources said. He stood up several times to criticize it, the sources added, arguing that the league should invest alone.
|Daniel Snyder led the charge against Providence.
The NFL first approved the existence of a venture capital fund in late 2011. The fund, backed by owner money, was intended to invest in startup ventures that could align with NFL interests. But after much fanfare for the fund’s creation, things went quiet, as the process of finding proper investments proved challenging.
Other teams that voted against the Providence deal, which will allow the equity fund to search for investments with the NFL, include the New York Jets, New Orleans Saints and Oakland Raiders, sources said. The identity of the other two teams that voted against the deal could not be determined.
New England Patriots owner Robert Kraft, who voted yes, said, “Certain owners feel we shouldn’t be venturing off our main focus.”
Saints owner Tom Benson, who declined to disclose his vote, said, “We are in the football business, not the ice cream business.”
New York Jets owner Woody Johnson also declined to disclose his vote but said he preferred the model the league agreed to in 2011, in which the league alone would invest in small startup companies. “Now we are going through Providence,” he said.
While six “no” votes out of 32 might not seem like much, an additional three “no” votes would have killed the deal under the league’s super-majority voting procedures.
The league has committed the same amount, $32 million, as it did with the first fund project. Providence now is committing $250 million with its involvement, a source said. If, however, the newly created fund were to buy any companies, Providence and the NFL would have equal say in the operations, the source said.
The league is expected to create a three-member owners advisory panel to oversee the NFL/Providence fund, this source said. NFL Commissioner Roger Goodell will appoint the panel members.
The rationale for no longer handling the fund in-house with outside advisers is that the league did not feel it had the expertise to manage it. Providence can scour the globe for sports and entertainment investment opportunities and bring them to the league.
“They have an infrastructure we can leverage,” Kraft said.