National Football League owners approved Tom Brady as minority owner of the Las Vegas Raiders on Tuesday.
The seven-time Super Bowl champion bought about 10% of the Raiders along with his business partner, Knighthead Capital founder Tom Wagner.
Brady and Wagner are buying into the Raiders at a valuation of about $3.5 billion, with an equity investment of about $220 million as part of the partnership, according to people familiar with the negotiations. In addition to that amount, Brady and Wagner had to pay a 10% “flip tax,” the proceeds of which would be divided among the league’s 31 other owners.
Separately, former NFL player Richard Seymour acquired less than a 1% stake in the Raiders, also at a valuation of $3.5 billion, the people said.
The NFL's 32 team owners unanimously signed the deal at the league meeting in Atlanta, the person told CNBC. Brady and Wagner did not attend the meeting, according to a person familiar with the matter.
“I am committed to contributing to the organization in every way possible, honoring the Raiders' rich tradition while finding every possible opportunity to improve what we offer to fans… and most importantly, WIN football games,” Brady said in an explanation.
In CNBC's official 2024 NFL team valuation, the Raiders were ranked the NFL's fifth most valuable franchise at $7.8 billion, meaning Brady and Wagner received a discount of over 50%. According to sports bankers, the typical discount for a limited partner who has no say in how the team is run and no ability to control ownership is 20% to 25%.
The Raiders' value has increased since the team moved from Oakland in 2020. Before the move, the team ranked in the bottom half of the league's 32 teams.
Since the team moved to Las Vegas and its new stadium, its revenue has increased significantly. According to CNBC estimates, the Raiders generated $780 million in 2023 revenue, third-highest in the league, and EBITDA of $115 million.
While the 65,000-seat Allegiant Stadium is among the smallest in the NFL, the Raiders compensated by charging the highest ticket price in the league, CNBC previously reported. The average general ticket price was $169 last season.
Allegiant Stadium, operated by the Raiders, hosts numerous non-NFL events throughout the year, providing additional revenue for the franchise. In 2023, the Raiders took in over $50 million from concerts and other events such as college football.
Brady's bid for part of the team began in May 2023, but was held up because some owners felt the original offer was too cheap.
After retiring from the NFL for the first time, Brady signed a 10-year, $375 million broadcast deal with Fox Sports in 2022. Brady's new ownership will bring restrictions on coverage of the team.
For example, Brady would be allowed to broadcast Raiders games but would not be allowed to participate in in-person or online production meetings. He also may not have access to team facilities, players and coaches.
Brady is also subject to league rules that prohibit public criticism of officials and other clubs.
The five-time Super Bowl MVP is no newcomer to the Las Vegas sports scene. He is also a minority owner of the Las Vegas Aces of the Women's National Basketball Association, which, like the Raiders, is owned by Mark Davis.
Brady will become only the third former NFL player to become a team owner.
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