Private equity charges into the NFL

Probe now, oust later: Klarna’s board is weighing the removal of a crucial ally of one of the company’s co-founders, in what would be the second big upheaval of the Swedish fintech’s board in recent months as it prepares for a blockbuster listing.

In today’s newsletter:

• Private equity gets an in to the NFL

• Mining bosses warn of M&A revival

• The billionaire donors shaping US universities

The NFL opens itself up to private equity

Wall Street will finally be able to get in on the most lucrative corner of US sports.

On Tuesday, the National Football League approved sweeping changes to its ownership policies, allowing private equity firms to take minority stakes in teams.

It’s the first time the league has opened itself up to the buyout industry — and the final major US sports league to allow such investments.

A handful of investment managers are at the front line, having already secured the status of so-called preferred buyers: Ares Management, Arctos Partners, Sixth Street and a consortium that includes Blackstone, Carlyle, CVC and Dynasty Equity.

Values of US football franchises have exploded in recent years, with some teams worth well into the billions. Last year’s $6bn sale of the Washington Commanders to Apollo Global Management co-founder Josh Harris set a record for most expensive sports team sale.

The NFL is the country’s most lucrative sports league. Its $110bn, 11-year media rights deal and generous revenue-sharing agreements have driven team valuations ever higher.

With Wall Street entering the mix, it will be easier for teams to raise capital and for existing owners to sell down their stakes or exit.

Major League Baseball was the trailblazer, becoming the first major US league to allow institutional investment back in 2019. Major League Soccer, the National Basketball Association and the National Hockey League soon followed.

The contingent of preferred buyers already on the NFL’s approved roster includes a who’s who of Wall Street — and many of them have already pushed into sports investing.

Ares has invested in Chelsea FC and Inter Miami. Arctos has stakes in the NBA’s Golden State Warriors. Sixth Street has invested in the San Antonio Spurs and Real Madrid.

US football has long been considered the ultimate trophy. And now, private equity and other institutional investors will finally be able to get a slice.

Is mining M&A about to make a comeback?

Fashion and music trends are said to come around in 20-year cycles. Y2K fashion is trendy again. Oasis, the band at the centre of 1990s Britpop, is back together.

However, another arcane area of the global economy is also making a comeback after a dormant stretch: mining.

The return of dealmaking by the diggers is pitting animal spirits in the boardrooms of the world’s biggest producers of iron ore, coal and other metals against the chastening mistakes of the past, when the industry overstretched itself during a deals frenzy between 2005 and 2012.

Michael Rawlinson, a former investment banker who is now chair of Adriatic Metals, a London-listed zinc and silver producer, points to similarities between today’s capital markets, where tech companies command sky-high valuations, and the dotcom bubble that burst in 2000.

At that time, China’s consumption of metals was starting to surge, but commodity prices were low and capital was expensive for miners. As a result, new supplies weren’t getting developed. That created a perfect storm for surging prices — and therefore megadeals — about 10 years later.

Instead of China, this time around the shift to clean energy is behind the rising demand for metals, as wind turbines, electric cars and power grids need shedloads of copper, iron ore and aluminium.

“Here we are in 2024 with possibly another tech bubble breaking, a backdrop of unrelenting demand growth for units, but nobody in the west has spent the money on projects to fill the gap,” said Rawlinson.

But the previous dealmaking boom brought the mining industry to its knees in 2015 when metal prices slumped and too much had been spent on new projects and deals.

While Oasis’s return will raise questions whether Noel and Liam Gallagher’s feud will reignite, for the mining industry, the critical question is whether overspending will also be a trait in the next wave of dealmaking.

For Mark Bristow, the South African chief executive of Barrick Gold, the world’s second-largest gold miner, the answer is clear: overstretching can “happen fairly easily”, he said.

Billionaire alumni wield their influence

In the ranking of billionaires making the most noise over recent perceived failures of their elite alma mater universities, Apollo’s Marc Rowan and Pershing Square’s Bill Ackman are high on the list.

The two Wall Street titans can claim credit for pressure that led to the resignations of at least three female Ivy League presidents in recent months following congressional grillings and critiques of their handling of student protests, and concerns over antisemitism on campuses.

The heads of Penn, Harvard and Columbia all resigned, with Cornell’s president taking early retirement. Their interim replacements are bracing for further turmoil as students return for the new academic year.

But when it comes to the good old-fashioned investor tactic of placing or withdrawing money, the loudest voices have been outranked by more supportive funders, the FT’s Andrew Jack reported this week.

Rowan led the charge of wealthy financiers including Ken Griffin who encouraged withdrawing new donations in response to what they argue is intolerance on campuses.

Yet a billionaire whose wealth came not from finance but rather healthcare has taken a different approach, by escalating support of certain universities as continuing centres of academic excellence.

Roy Vagelos, the former head of Merck and chair of Regeneron, and his wife have almost doubled their donations to their former universities of Penn and Columbia, which now total over $1bn.

As he told the FT: “The idea of stopping the functioning of a university because there’s a dispute among some people sounds like a ridiculous response.”

While Vagelos has opted for a generally hands-off approach, huge donations from wealthy alumni have nonetheless made universities vulnerable to donors’ demands.

“We don’t really have policies to think about what a philanthropic donation entitles you to do,” said Amir Pasic, dean of the Lilly Family School of Philanthropy at Indiana University. “Formally, it should not give you any larger governance voice.”

Job moves

• Citadel’s head of equity capital markets Mark Maislish has left the hedge fund after just a few months for a role outside the financial sector, according to a person familiar with the matter. He was previously the head of equity syndicate in Europe for Goldman Sachs.

• Weil Gotshal has hired Alice Yuan as a partner in the firm’s private equity group in Los Angeles. She previously worked for Massumi + Consoli and Kirkland & Ellis.

• Fortress Investment Group has appointed Damola Adamolekun as the next chief executive of Red Lobster, with the restaurant chain set to be bought by Fortress and other lenders out of bankruptcy. He was formerly the CEO of PF Chang’s.

Smart reads

Monopsony risks The Kroger and Albertsons tie-up would be the biggest US supermarket merger ever, Lex writes. But now, it has to face off against the FTC’s concerns about how it could hamper workers.

Hindenburg’s latest target The short seller is taking aim at Super Micro, the archetypal stock of artificial intelligence mania, Alphaville writes.

Office meltdown Central business districts — often the traditional heart of cities — are being hit particularly hard by the commercial real estate sector’s turmoil, Bloomberg reports.

News round-up

Burkina Faso nationalises two gold mines mired in legal dispute (FT)

French authorities extend custody of Telegram chief to legal limit (FT)

Amazon signs podcast deal with Kelce brothers to further audio goals (FT)

Ryanair expects airfares to continue to fall this winter (FT)

Chip challengers try to break Nvidia’s grip on AI market (FT)

Eli Lilly launches cheaper viral version of blockbuster weight-loss drug (FT)

Klarna aims to halve workforce with AI-driven gains (FT)