Hello Everyone,
I recently came across the news of Tom Brady acquiring a minority stake in the Las Vegas Raiders as a limited partner in the franchise along with his business partner Tom Wagner for $220 million. 1 Under the limited partnership scheme, Brady is likely to have limited control over day-to-day operations but is entitled to a share of profits and may influence strategic decisions depending on the specific terms of their ownership agreement.
As we discussed during our last class, leveraging a reputation for a board seat or ownership is not restricted by the Company Act unless it involves fraud or violates consumer protection laws and an example of someone like Donald Trump was discussed. In the present case, a dilemma of Tom Brady’s involvement with Fox was raised, as being a member of the broadcast, he had access to meetings with players and coach interviews, which could provide him with some valuable insights to inform his investment. 2
I wanted to bring this example as an additional way of regulating corporate transactions, as it is governed by the NFL-specific rule of ownership, in addition to any requirements of the US Companies Act. In this case, NFL regulations came as a safeguard against the conflict of interest, forcing Brady to abide by the NFL’s Constitution and Bylaws and adding restrictions on his operations with Fox, prohibiting him, for instance, from interactions with the coaches and players, as well as imposing other additional restrictions.3
1 Michael Ozanian, “Tom Brady and partner Tom Wagner to pay over $200 million for stake in Las Vegas Raiders”, online: CNBC https://www.cnbc.com/2024/10/15/tom-brady-to-be-part-owner-of-nfls-las-vegas-raiders.html
2 Ed Dixon, “NFL Owners Approve Tom Brady’s Las Vegas Raiders Minority Stake”, online: https://www.sportspromedia.com/news/tom-brady-las-vegas-raiders-minority-stake-ownership-confirmed/
3 ibid.
