TLDR:
- Private equity investments in sports teams began in 2006 but have recently increased significantly
- Leagues now allow private equity funds to own stakes in teams due to booming team values and the promise of beating the stock market
Private equity investments in sports teams have seen significant growth in recent years, with institutional investors now owning stakes in at least a dozen teams across major leagues. The first private equity investment in sports happened in 2006 when three American funds bought a majority of Paris Saint-Germain, a famous soccer team in Europe.
Private equity’s interest in sports teams has grown due to booming team values, with the average value of an NBA team reaching $4 billion. Leagues have become more comfortable with private equity investors due to the structure put in place to ensure control and ownership are maintained by team owners. Leagues also see the potential for non-correlation benefits from sports investments, which can provide stability to institutional investors’ portfolios.
Overall, there are now billions of dollars invested in sports through private equity funds, with both sports-specific and broader-focused funds participating in the market. The amount of private equity investment in sports is expected to rise, opening up new opportunities and sectors for exploration within the industry.
