More than a third of clubs in Europe's Big Five soccer leagues are backed by US investors, including private equity firms and high-net-worth investors, according to PitchBook. "It's brought this sense of building up real companies around these assets that used to be thought of as nice-to-have trophy assets that you could talk about at cocktail parties," he told Insider.Īmerican investors are also becoming more dominant in European soccer leagues, according to Voynov. Due to the rising costs of controlling stakes, many have formed syndicates of other high-net-worth limited partners to buy teams. He has observed that newer investors, whether their backgrounds are in tech or private equity, have brought a new sophistication to sports team ownership. Much of this resilience can be credited to the rising value of media rights, according to Ivo Voynov, who leads sport finance for Citi Private Bank. "Sports, given the passion aspect of it, will continue to play an important role in people's lives," he said. Even when discretionary income drops, some consumers continue to go to games in order to take their minds off their troubles, Kantarian said. Professional sports are viewed by many as a recession-proof investment. Most investors become passionate owners even if they weren't sports buffs before "Some of what's driving interest towards these more nascent leagues is that the entry point is achievable, especially if you want to have a say in club operations and be any kind of decision-maker," Kantarian told Insider. Apollo cofounder Josh Harris bought the NFL's Washington Commanders for a record-breaking $6.05 billion this summer. A controlling stake in a NFL team requires at least $2 billion of cash equity, he told Insider. These trends are likely to continue as valuations show no sign of cooling off, according to Brian Kantarian, head of sports finance in JPMorgan's private bank. Less popular sports, such as pickleball, are also drawing investors, with LeBron James buying a team this past October.Įven billionaires are looking overseas for opportunities, such as former co-owner of the NBA's Milwaukee Bucks Marc Lasry, who is eyeing African and Asian basketball teams. Actors Ryan Reynolds and Rob McElhenney, for instance, bought Welsh minor-league soccer club Wrexham AFC for $2.5 million in 2021. Many are joining forces in order to amass enough cash for a controlling stake. As a result, aspiring team owners have gotten more creative to seal the deal. Now rich individuals have to compete with institutional investors like private equity firms and sovereign wealth funds for a limited number of teams. The average price return for an NBA team, for example, was 1,057% from 2002 to 2021, per PitchBook. Sports franchises used to be viewed as trophy assets but have emerged as an asset class with robust returns. Mergers and acquisitions in most industries have slowed to a crawl across the globe, but the demand for sports teams has never been stronger. Bankers to the rich told Insider which sports are drawing moneyed clients.Valuations show no signs of cooling off with billionaires and private equity firms in bidding wars.2023 has been a big year for sports M&A, including a $6 billion sale of the Washington Commanders.Account icon An icon in the shape of a person's head and shoulders.
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