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Private equity firm joins list of potential buyers in Bills minority stake

By Michael Petro

Private equity firm joins list of potential buyers in Bills minority stake

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There's another potential suitor reportedly interested in investing in the Buffalo Bills and this time, it's a private equity firm.

Sports teams are family businesses. Sometimes a partner can help

The Bills confirmed in late April that owner Terry Pegula was looking to sell a stake of up to 25%, and that immediately triggered speculation: Which wealthy people might be interested in becoming a minority-share owner?

Arctos Partners, which is already approved by the NFL as a potential team investor, is in talks with the Bills about purchasing a minority stake in the team, according to a report by Bloomberg News.

On its website, Arctos Partners says it is a private investment platform dedicated to the professional sports industry and sports franchise owners. It already has a stake in multiple professional teams across an array of leagues.

The company is likely not alone in its interest in the Bills. Other groups, like one led by former basketball stars Vince Carter and Tracy McGrady, have been linked to potentially having been in negotiations or flirting with the idea.

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Team owner Terry Pegula earlier this year hired an investment firm to potentially sell a minority ownership stake in the team, which is now valued at over $5 billion by Sportico.

NFL team owners provisionally approved in August new rules that will allow private equity firms to buy passive minority stakes in franchises by a 31-1 vote during a gathering in Minnesota, opening up the pool of potential minority investors to a new group of deep-pocketed investors.

They permitted only four private-equity groups to participate: standalone firms Arctos Partners, as well as Ares Management Corp. and Sixth Street, plus a consortium of five funds - Blackstone, Carlyle, CVC, Dynasty Equity and Ludis. All have been initially vetted by the NFL.

The Bills cannot disclose who they are negotiating or speaking with during this process but said earlier this month that there has been a "significant amount of interest" among potential minority partners.

"Our focus has been on finding the right partners for our organization," the Bills said in a statement. "The process is ongoing, and any potential investor cannot be confirmed or finalized until it is approved by the NFL."

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Arctos Partners already has invested in a variety of professional and major sports franchises and teams, including Major League Baseball's Boston Red Sox and Los Angeles Dodgers, National Basketball Association's Golden State Warriors, and the National Hockey League's Tampa Bay Lightning. It's also invested in Major League Soccer, international soccer clubs Paris Saint-Germain F.C. and Liverpool F.C. and the Aston Martin Formula 1 team.

The NFL has done well with more restrictive ownership policies than other professional sports leagues, but adding capital from other sources will help increase the already limited pool of investors with access to the hundreds of millions of dollars needed to buy even a minority stake in an NFL franchise.

The value of teams has become so astronomical that it's hard to hold off the private equity firms any longer.

Pegula is looking to sell a minority ownership stake of around 25% in the Bills.

He retained Florida-based investment firm Allen & Co. to explore the potential sale of a noncontrolling interest in the Bills, the team confirmed in April. Allen & Co., which offers wealth management services, advised the Pegulas in their initial purchase of the team. Terry Pegula bought the Bills for $1.4 billion in 2014.

Selling up to 25% of the team could pull in around $1 billion and maybe even more for Pegula, who is likely in need of capital as the cost of building a new $1.7 billion stadium has become more expensive.

Former pro athletes with Toronto ties reportedly in talks to buy Bills' minority stake

A report says that former NBA stars Vince Carter and Tracy McGrady and former U.S. Soccer star Jozy Altidore are in talks about buying a minority stake in the Buffalo Bills. The Bills would not confirm the interest of the three but did say there has been a "significant amount of interest" among potential minority partners.

Carter and McGrady, along with former U.S. Soccer star Jozy Altidore, were all in attendance at Highmark Stadium when the Buffalo Bills played a Monday night home game Sept. 23 as guests of Bills owner Terry Pegula.

Shortly afterward, it was reported by Sportico, an online sports industry publication, that the three are interested in and in talks about buying a minority stake in the team.

All three former professional athletes have Toronto connections. Both Carter and McGrady began their NBA careers with the Toronto Raptors, while Altidore played seven seasons with MLS club Toronto FC.

Also, watching an optional Bills training practice during the summer from the sidelines was Snyder native Jeffrey Gundlach, the billionaire investor whose $65 million contributions fueled the expansion of the Buffalo AKG Art Museum.

Gundlach, who is the co-founder and CEO of mutual fund company DoubleLine Capital, would be on a speculative list of potential candidates for a potential minority stake in the team as well.

The Bills have said they are open to adding multiple limited partners.

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