Providence Equity Commits $250M From Fund VI For NFL Pact

  • Providence Equity Partners bets a quarter billion dollars on NFL alliance: source
  • Rhode Island buyout firm wins high-profile partner as it works on new fund
  • Partnership to target investments of up to $50M in private firms

The Providence, R.I.-based private equity firm will tap into capital from Providence Equity Partners VI LP, its $12.1 billion, 2006-vintage pool, for the NFL partnership with plans to invest $25 million to $50 million at a time. The NFL’s commitment is about $50 million. A spokesman for Providence Equity Partners declined to comment.

“We believe there are many traditional and digital media properties that complement the NFL’s business and can add lasting value,” Paul Salem, senior managing director at Providence, said in a prepared statement. He did not give any interviews despite strong media interest in the announcement, according to a person familiar with the firm.

Under disclosure rules enforced by the Securities and Exchange Commission, quiet periods apply to private-equity firms during fundraising efforts.

In an interview with CNBC-TV’s Maria Bartiromo, the NFL’s Eric Grubman said the league picked Providence Equity because the firm “is very good” at seeking opportunities in the media and technology sectors.

“The beauty of this arrangement that we have with Providence is that we’ll use their infrastructure to look at the investments, to make decisions about the investments, and then once [an investment] is made, they have people who are able to manage those portfolio companies,” said Grubman, executive vice president of business ventures at the NFL.

Providence Equity Partners VI had delivered an investment multiple of 1.1 and an internal rate of return of 5.54 percent as of Dec. 31, 2011 for Washington State Investment Board. The board had committed $300 million to Providence Equity Partners VII as of Sept. 5.