Sports investing has seen significant growth in recent years as franchises, leagues, media rights, and brand-driven businesses (such as sports apparel and streaming) increase in value. What was once limited to billionaires is now becoming more accessible to a broader range of investors.
Potential Benefits of Sports Investing:
| Benefit | Why It Matters |
| Scarcity Premium | Sports teams are limited assets → supply stays constant while demand rises. |
| Steady Asset Appreciation | Historically, sports teams’ valuations have risen faster than inflation or GDP. |
| Non-Correlation | Sports assets have low correlation with stock and bond markets → portfolio diversification. |
| Growing Media Revenues | Massive growth in broadcast/streaming rights (especially NFL, NBA, global soccer). |
| Global Fan Growth | Younger demographics globally are engaging more through streaming, betting, and mobile platforms. |
| Access to New Revenue Streams | Tech innovation (betting, NFTs, fantasy sports, social media engagement) expands monetization. |
| Inflation Hedge | Teams with strong brands can raise ticket prices, rights fees, and merchandise costs during inflationary periods. |
| Emotional/Prestige Returns | Investors get exclusive access to events, branding opportunities, and high social prestige. |
Trend 1: PE Investing in Sports
Historically, owning sports teams was mainly the domain of individual billionaires or family dynasties. However, over the past five years, leagues like the NBA, MLB, MLS, and NHL have modified ownership rules, allowing PE firms and institutional investors to purchase minority stakes in teams. Funds like Arctos Sports Partners, RedBird Capital, Sixth Street, and Dyal HomeCourt now own shares in multiple teams.
Sports teams are scarce assets; for instance, there are only a limited number of NBA franchises. Media rights are consistently growing, and teams tend to appreciate in value over time, regardless of profitability (long-term capital gains).
This shift leads to more professional, “financialized” ownership models and higher valuations, as institutions can pay more and increase competition. Minority stakes may sell at discounts but come with fewer rights and are generally passive investments.
Examples:
- Arctos owns stakes in several MLB teams, such as the Dodgers and the Cubs, as well as NBA teams.
- RedBird has a stake in Fenway Sports Group, which includes Liverpool FC and the Boston Red Sox.
- Sixth Street holds a significant portion of FC Barcelona’s commercial rights.
Trend 2: Valuation Inflation
The number of major sports teams in leagues like the NFL, NBA, MLB, and EPL is fixed or grows very slowly, while demand from billionaires, celebrities, and institutional investors is soaring. This imbalance between supply and demand drives valuations higher.
- The average NBA team is valued at $3.85 billion, a rise of approximately 75% in just five years.
- NFL media deals now exceed $110 billion over 11 years.
- Manchester United has reportedly been valued at over $6 billion during sales discussions.
Even “mediocre” franchises (those without championships or in smaller markets) are worth billions. The cost of entry is becoming prohibitively expensive, favoring large institutional investors.
Investors are focusing on long-term capital appreciation driven by media growth and brand value rather than immediate profitability, as many teams operate near breakeven.
Trend 3: Convergence of Technology and Betting
Sports, technology, and betting are increasingly blending into a single ecosystem. Teams and leagues are monetizing fans through avenues such as streaming, fantasy sports, sports betting partnerships, and digital collectibles (NFTs).
Examples:
- FanDuel and DraftKings have formed large partnerships with leagues, teams, and media companies.
- NBA Top Shot has sold digital basketball card NFTs for millions.
- Amazon and Apple are acquiring rights to stream NFL and MLB games directly.
This evolution creates new revenue streams, including betting sponsorships, streaming subscriptions, and digital collectibles. Teams and investors are now focusing on lifetime fan value instead of just ticket sales, with tech-savvy franchises like the Golden State Warriors being well-positioned to leverage these opportunities.
Trend 4: Retail Democratization
Sports investing was traditionally reserved for billionaires and large institutions. New platforms are emerging that allow retail investors to own small shares of sports assets.
Examples:
- Rally Rd. and Collectable offer fractional shares of memorabilia, like Michael Jordan rookie cards and game-worn jerseys.
- DAO models (Decentralized Autonomous Organizations) are crypto communities aiming to purchase sports teams, similar to projects like ConstitutionDAO.
- Fan tokens (e.g., Socios.com) allow fans to participate in club decisions of European soccer teams.
These developments enable everyday fans to engage both emotionally and financially. While it’s still an early-stage and niche area—full team ownership by the crowd remains rare—regulatory and legal hurdles (such as securities laws) present ongoing challenges.
Investment Vehicles by Investor Type
For Institutional Investors
1. PE Funds Focused on Sports
Examples: Arctos Partners, RedBird Capital, Dynasty Equity, Dyal HomeCourt Partners.
- Focus: Acquire minority or majority stakes in professional sports teams, leagues, and related businesses (including media rights and fan engagement platforms).
- Access: Typically closed-end funds with minimum investments of $5 million; limited to accredited or qualified investors.
2. Direct Team Ownership
- Who: Family offices, sovereign wealth funds, and pension funds (some pension funds are now allowed to invest in teams—NBA has changed its rules).
Example: Qatar Investment Authority’s investment in Paris Saint-Germain; Arctos acquiring minority stakes in MLB and NBA teams.
3. SPACs (Special Purpose Acquisition Companies)
- Blank-check companies formed to acquire sports properties, including those in media, tech, and betting.
Example: RedBall Acquisition Corp attempted to invest in Fenway Sports Group.
4. Sports VC
- Focused on early-stage sports tech startups (including fan analytics, VR sports, and wearable tech).
Example Funds: CourtsideVC, Sapphire Sport.
For Retail Investors
1. Publicly Traded Sports Companies
Examples:
- Manchester United (NYSE: MANU)
- Formula 1 Group (NASDAQ: FWONA)
- Madison Square Garden Sports (NYSE: MSGS), which owns the NY Knicks and Rangers
- Liberty Media (which owns F1 and holds stakes in the Braves)
2. Sports-Related ETFs
While few direct sports ETFs exist, investors can consider related themes:
- BETZ ETF: Focuses on esports and sports betting.
- POWR ETF: Concentrates on global sports and recreation companies.
3. Fan Ownership Models / Crowdfunding
- Platforms: Some online marketplaces allow fractional ownership of teams or memorabilia (such as Rally Rd. and Collectable).
Example: You can purchase tiny fractions of vintage sports memorabilia or, in rare cases, stakes in lower-tier teams.
4. NFTs / Digital Collectibles
- Platforms: NBA Top Shot, Sorare allow investments in sports-based digital assets (note that these can be speculative and volatile).
Investment Strategies
Sports investing represents a unique segment of the investment market where capital is directed into sports-related assets, teams, leagues, media rights, infrastructure, and even technologies associated with sports. These investments leverage the global appeal and financial dynamics of sports, aiming to generate returns through a combination of growth, profitability, and strategic exits.
| Strategy | Description | Examples |
| Minority Stake Acquisitions | Buy non-controlling stakes in professional sports franchises. | Arctos Partners buying into NBA and MLB teams. |
| Control Deals | Acquire full ownership or controlling interest in a club or organization. | RedBird Capital buying AC Milan football club. |
| League-Wide Partnerships | Invest at the league level (e.g., media rights packages, joint ventures). | CVC Capital’s deals with rugby and LaLiga media rights. |
| Adjacent Industries | Invest in sports media, tech startups (streaming, fan engagement platforms), sports betting companies. | CourtsideVC funding sports tech startups. |
| Real Estate & Infrastructure | Invest in stadiums, training facilities, mixed-use real estate tied to teams. | Sixth Street Partners investing in FC Barcelona’s stadium rights. |
| Secondary Markets/Fractionalization | Trade minority stakes in teams or sports-related collectibles (emerging area). | No major scaled examples yet, but some funds exploring it. |
Assessing Opportunities in Sports Investing
Quantitative Factors
Revenue Streams
- Ticket sales, media rights, sponsorships, licensing, merchandise, concessions, betting.
Historical and Projected Financials
- Past 3–5 years: Revenue growth, EBITDA margins, net income trends.
- Future projections: Expected growth drivers (new TV deals, expansion).
Valuation Metrics
- Price-to-Revenue (P/R) and Price-to-Earnings (P/E) multiples.
- Comparison to other teams/assets in similar markets/leagues.
Cash Flow and Profitability
- Is the business self-sustaining, or does it burn cash?
- Are media deals front-loaded or back-loaded?
Debt Levels and Capital Structure
- High debt = higher risk (especially in recessions or lockouts).
Market Size & Demographics
- Bigger markets attract bigger sponsorships and more lucrative media rights.
- Young, growing fanbases are better than aging, shrinking ones.
Asset Appreciation
- Historical franchise valuation growth (NBA, NFL, EPL teams have outperformed traditional investments).
Exit Opportunities
- Liquidity: How easily can you sell your stake? (full ownership vs. minority stake matters here)
Qualitative Factors
League Stability and Growth
- Is the league expanding or contracting?
- Strong leagues (NFL, NBA) = safer bets; volatile leagues = higher risk.
Brand Strength and Loyalty
- How emotionally attached are fans to the team/league?
- Strong brands create pricing power and resilience in downturns.
Management Quality
- Experienced, innovative leadership drives better financial and on-field outcomes.
Venue Ownership or Lease
- Owning the stadium/arena = massive revenue upside (naming rights, events, concessions).
- Bad lease deals can be long-term financial handcuffs.
Fan Engagement and Digital Reach
- Active social media presence, global fanbase, esports tie-ins, and streaming channels add value.
Media and Sponsorship Rights
- Stability, length, and upside potential of media deals are critical.
- Sponsorship alignment with powerful brands is a big plus.
Innovation and Technology Adoption
- Teams investing in fan data analytics, VR, NFTs, gamification, sports betting integrations are future-proofing.
Cultural Relevance and Legacy
- Is the team just a business, or a part of the city’s identity?
- Cultural icons tend to retain and grow value better.
Political/Regulatory Risks
- Labor strikes, rule changes, betting law changes, and antitrust concerns can massively impact value.
Ownership Structure and Rights
- Minority stakes often come with restrictions (no voting rights, no control).
- Understand what operational or strategic influence (if any) you get.
Risks Management
| Risk | Management Approach |
| Valuation Risk | Only invest in disciplined valuation frameworks; stress-test downside scenarios. |
| Liquidity Risk | Long lock-up periods (5–10 years typical); funds may offer secondaries for partial liquidity. |
| Operational Risk | Invest in teams/leagues with strong governance and proven management. |
| Regulatory Risk | Monitor labor agreements (CBAs), antitrust issues, sports betting laws closely. |
| Concentration Risk | Diversify fund exposure across teams, leagues, geographies, and asset types (not just a single club or league). |
| Market Disruption (e.g., Pandemic) | Insure key assets (e.g., event cancellation insurance) and model no-revenue scenarios. |
| Technology Disruption | Focus on teams/leagues innovating in digital fan engagement, streaming, and tech. |
| Currency Risk (International Deals) | Hedge currency exposure when investing in global assets (e.g., EPL clubs, LaLiga teams). |