When billionaire Mat Ishbia acquired a majority stake in the NBA’s Phoenix Suns, it wasn’t just a win for the team—it was a triumph for alternative asset managers like Blue Owl Capital. A subtle player in the financial arena, Blue Owl’s private equity fund, Dyal HomeCourt Partners, witnessed a staggering 158% growth in its 5% stake in the Suns within a mere 18 months.
This foray into sports investment symbolizes a burgeoning trend in the world of finance, where the professional sports market in North America has gradually opened its doors to private equity firms seeking minority stakes in teams. What began with Major League Baseball has now spread to the NBA, NHL, and MLS, attracting investment capital like moths to a flame.
While private equity firms are restricted from holding controlling interests in teams, the allure of sports franchises lies in their booming revenues from streaming, sports betting, sponsorships, and intellectual property rights. With private equity-backed firms owning stakes in 63 North American sports teams valued at a whopping $243.8 billion, the sector is teeming with opportunities for investors.
Venturing into the game are firms like Texas-based Arctos Partners, making sports investment accessible to high-net-worth clients through innovative fund structures. As the industry evolves, financial advisors are beginning to recognize the potential of sports investment to diversify portfolios, safeguard against inflation, and generate substantial capital gains.
Despite the nascent stage of sports investing in the private wealth sector, the trajectory of team valuations and the unique financial benefits offered by this niche asset class have piqued the interest of investors seeking uncorrelated returns. With growing momentum, sports investment is proving to be a field ripe with promise, offering a unique entry point into the enthralling world of professional sports and substantial financial rewards for savvy investors willing to play the game.
