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Venture capital fund seeks to boost NFL revenue

05/28/2013 1:39 AM ET
By Matt Hughes

The NFL is teaming up with Providence Equity Partners in hopes of increasing league revenue by investing in media projects.(AP)
The new venture capital arm of the NFL is seeking to grow league revenue.

The NFL will team with Providence Equity Partners to focus on investing in media companies. The new venture signals a bold move by the NFL to broaden its revenue base.  

Team owners have committed $32 million to the fund and Providence is investing $250 million. The partners will have an equal stake in the venture because while Providence's cash outlay is higher, the NFL brings its considerable brand equity to the deal. All profits will be divided equally by the league's 32 teams. 

Providence has a long track record of successful media investments, including in the YES Network.

Eric Grubman, NFL executive vice president of business and a Goldman Sachs veteran, is managing the investment portfolio.

The NFL is currently a $9.5 billion business but commissioner Roger Goodell has stated the league's goal is to reach $25 billion in revenue by 2027. The new venture capital fund is a first for a professional sports league and shows that the NFL is intent on creating new revenue channels in order to reach its goals. 

While league officials had previously stated that investments would focus on media and entertainment companies with some connection to the NFL, league representative Brian McCarthy said investments outside the periphery of football are a possibility.

"We are much more than a game on the field," McCarthy said. "As our core business, we always focus on that, but it's a sports and entertainment and media venture that the NFL has spun into. At one point it was just a game, but we've seen the value it has to other businesses. We see the value it has to Madison Avenue. We see the value it has to our media partners. So we're continuing looking for ways to grow our business, expand the footprint of the NFL."

Mike Vorkunov of The Star-Ledger reported on the new fund.

Follow us on Twitter @hughesmatt and @YESNetwork for more.

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