When people ask me about legal concepts in sports, I think more about how to bring the best ownership to the table and how to allow for more owners to participate in the league. Each league has different restrictions as far as ownership and sports management are concerned. There are restrictions that limit how much debt or leverage an owner can have, and even rules for who can be an owner and how much responsibility a general partner should have.
And so, the legal side of owning a sports franchise starts with team agreements and franchise agreements. These are typically complex documents, but they describe how owners have to perform within a league.
An owner needs to understand how much of a team they are allowed to own and how much they can borrow to purchase a team. Can they have limited partners? Are they allowed to have corporate ownership or outside ownership? What kind of information flows to the team owners and the league, and how does that information help owners?
The franchise agreement is a very, very interesting agreement, and it has evolved. It’s changed the way the National Football League does business as it’s tried to increase the value of its franchises.
The only way to increase the value of NFL franchises in the world of global sports is to increase the audience that may be able to buy a franchise. One way to do that is to allow for cross-ownership or to allow for owners of other sports teams in different cities to own NFL franchises. That’s a new way that they’ve tackled the issue in addition to making sports management education and online sports management education more accessible to potential franchise owners.
