Though the NFL still won’t allow them, PE companies and executives are profoundly invested in many of the most successful, most valuable teams in sports — take a closer look at the full list.
There’s no investment under the sun that’s 100% foolproof, but given the steady increase in valuations among professional sports franchises year after year, we may be looking at the next closest thing.
Major North American sports organizations have appreciated as assets at a higher rate than both inflation and key index funds like the S&P 500 for many years. Forbes estimated in 2022 that the average NBA franchise value increased 15% from the year before — the Los Angeles Clippers‘ $3.9 billion valuation is nearly double what it was years ago when former Microsoft executive Steve Ballmer purchased the team in 2014 for a then-record $2 billion.
It’s no coincidence, then, that sports leagues’ rules have become more lenient over the years as to allow private equity companies to buy minority stakes in their respective franchises. On Sept. 6, data research and insight firm PitchBook released a study exploring just how deep the sports private equity rabbit hole truly goes in North America across the NBA, MLB, Major League Soccer, and NHL — and what that might say about what happens next.
Check out our topline overview below.
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Sports Private Equity Ownership & Investment Snapshot
- A total of 63 North American sports teams across the NBA, MLB, MLS, and NHL have private equity ties, which PitchBook defines as either direct investment from such companies or through individual co-owners who are PE-affiliated.
- The total value of these franchises adds up to an estimated $205.9 billion.
- Notably, the NFL — the most profitable sports league in the world top-to-bottom — does not yet allow private equity investment.
The NBA Private Equity Landscape
The NBA leads the way with 20 of its 30 teams having some direct ownership connection to private equity.
- Dyal HomeCourt Partners is the latest to enter the fray when it joined a group that purchased the Charlotte Hornets from Michael Jordan earlier this year at a $3 billion valuation.
- Dyal also has a stake in the Sacramento Kings and more than doubled profits off its initial investment when the Phoenix Suns sold earlier this year to Mat Ishbia.
- In 2021, Arctos Sports Partners increased its stake in the Golden State Warriors to 13% a year before purchasing a separate stake in the Utah Jazz.
- Also in 2021, Sixth Street Partners bought 20% of the San Antonio Spurs at a $1.8 billion valuation that’s sure to charge ahead after the team drafted Victor Wembanyama No. 1 overall in June’s NBA Draft.
NBA TEAMS CONNECTED TO PRIVATE EQUITY: Hawks, Celtics, Nets, Hornets, Cavaliers, Pistons, Warriors, Pacers, Lakers, Bucks, Timberwolves, Pelicans, Thunder, 76ers, Suns, Trail Blazers, Kings, Spurs, Jazz, Wizards
MLB PE Investments
Not to be outdone by much, 18 of the 30 Major League Baseball teams have a private equity relationship.
- Arctos and RedBird Capital Partners each have stakes in the Boston Red Sox
- Arctos additionally owns a piece of the Chicago Cubs, Houston Astros, Los Angeles Dodgers, San Diego Padres, and San Francisco Giants.
MLB TEAMS CONNECTED TO PRIVATE EQUITY: Diamondbacks, Orioles, Red Sox, Cubs, Reds, Guardians, Astros, Royals, Dodgers, Marlins, Brewers, Yankees, Athletics, Padres, Giants, Mariners, Cardinals, Rangers
They shoot. Do they score? As private investment firms become further entrenched in the ownership structures of professional sports franchises, time will tell if these sports-focused funds generate outsized returns for LPs.https://t.co/Js7qQiD9dB
— PitchBook (@PitchBook) September 9, 2023
Private Equity in MLS
In Major League Soccer, 15 of the 29 franchises include private equity ownership in some form.
- Ares Management invested $150 million into Inter Miami in 2021 and an additional $75 million in August, an investment set to pay off handsomely following Lionel Messi‘s summer signing.
- Bennett Rosenthal, Ares’ chairman, has a significant stake in defending MLS Cup champion LAFC.
- In 2022, Arctos purchased a 15% stake in the Portland Timbers and NWSL‘s Portland Thorns at a $600 million valuation. Its investment in the Jazz also included a stake in Real Salt Lake.
MLS TEAMS CONNECTED TO PRIVATE EQUITY: Austin, Charlotte, DC United, Houston, Inter Miami, Nashville, New England, NYCFC, Philadelphia, Portland, Real Salt Lake, San Jose, Sporting KC, Toronto
PE Investors in the NHL
The NHL has just 10 of its 32 teams involved in PE.
- Arctos holds stakes in the Minnesota Wild and Tampa Bay Lightning.
- RedBird Capital-backed Fenway Sports Group purchased a majority stake in the Pittsburgh Penguins in 2021.
NHL TEAMS CONNECTED TO PRIVATE EQUITY: Hurricanes, Wild, Canadiens, Devils, Islanders, Penguins, Kraken, Lightning, Maple Leafs, Capitals
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