The sports industry is looking at an accelerating investment trend where firms are acquiring stakes in professional teams and leagues and raising company valuations. The latest franchise to be a part of this trend is the Cleveland Browns, who sold a 3% stake to Arctos Partners, a private equity firm. 

NFL owners recently approved the deal, giving the Haslam family, who own the Browns, a 9x return on the $1 billion they put in in 2012. The total transaction is for 10% of the club at a valuation higher than $9 billion.

“Arctos brings deep and respected expertise across sports, and we welcome them as a limited partner,” said Dee and Jimmy Haslam in a joint statement published on Bloomberg. “They share our long-term vision for investing in both the franchise and Northeast Ohio.”

The Haslams further added that, along with Arctos, they will continue to build a championship-caliber organization, elevate the fan experience, and support transformative opportunities that create lasting impact for the region.

Per a report by the Newsroom, the deal will also improve the cash flows for the Browns as they build their ambitious $2.6 billion domed stadium in Brook Park. With $600 million coming in from Ohio State and major capital from the Haslams, Arctos will help in justifying the premium being paid for the project.

The 3% stake at a valuation of $9 billion will produce roughly $270 million. While it doesn’t fully cover for their domed stadium project, it provides enough working capital for the Browns at market price. 

According to Randall Williams of Bloomberg, in 2024, the NFL started allowing institutional investors to buy minority stakes in teams to help boost the surging club valuations. One of the first private equity firms to get the nod from the league was Arctos who already has stakes in the Buffalo Bills and the San Diego Chargers.

Arctos Partners already has a portfolio of $15 billion in sports investments. The company sees the Browns’ stadium project as a catalyst for long-term revenue growth. 

The Browns’ Ambitious $2.6 Billion Huntington Bank Field Project

In April, the Haslam Sports Group announced the groundbreaking of the Huntington Bank Field domed stadium, which is likely to become the future home of the Cleveland Browns starting in the 2029 season. 

The domed stadium is also touted to be North Ohio’s largest economic development project to date. The Haslams said that the project will be an economic catalyst for the region and will deliver best-in-class fan experiences and exciting events throughout the year. 

AECOM Hunt and Turner Construction Company are the construction managers for the state-of-the-art facility. The enclosed stadium, built for a capacity of 75,000, aims to host world-class events throughout the year, like the Browns games, NCAA final tours, international soccer matches, and concerts.

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Written by

Naomi Grace

Edited by

Zaid Quraishi