Private equity is betting on a future beyond the “Caitlin Clark effect.”
Last week, I wrote about women’s sports becoming a compelling value play for PE funds thanks to lower valuations relative to men’s sports, growing fan bases, merchandise sales and viewership statistics. The idea is to use institutional capital to build the infrastructure—stadiums, ticket sales, practice facilities, merchandise and sponsorships—that enables a franchise to fully capitalize on a star player when they get one.
And firms are pitching this moment in women’s sports to LPs as a chance to invest early in a burgeoning empire.
“If you enter into an area where there’s less demand and there just hasn’t been the infrastructure and the flywheel, you can meet that demand, create a profitable business and exit,” said Ashley Marks, co-founder and co-managing partner at Cordillera Investment Partners.
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Historically, women’s franchises have been left out of PE’s foray into sports.
“We still think women’s sports is pre-institutional,” said Marks, whose firm is part of the ownership group of the National Women’s Soccer League’s new Denver team.
Armed with billions of dollars worth of LP commitments, firms like Artcos and RedBird Capital Partners have amassed minority stakes largely in men’s professional teams. Today, 74 major North American sports teams with a collective value of nearly $230 billion across the NBA, MLB, MLS, NHL and NFL have some kind of connection to PE, according to PitchBook’s sports dashboard.
That’s more than the valuation of the top women’s sports leagues combined. And investors are noticing the opportunities.
"[Caitlin Clark] is not the first time that star power has been at play, but we haven’t seen the commercialization [of women’s sports] happen in the way it is this time,” said Jason Wright, managing partner and head of investments at Ariel Investments, where he runs the women’s sports investment fund.
Last week, the National Women’s Soccer League’s new Denver team, which will begin its first season in 2026, finalized its ownership group, including majority owner and insurance executive Rob Cohen, Ariel Investments, football superstar Peyton Manning and others.
Sports are a particularly interesting, differentiating play for investors in the age of AI and the digitalization of the economy.
“Things that you cannot replicate with AI will continue to increase drastically in value,” Mary Callahan Erdoes, CEO of the asset and wealth management division at JP Morgan, said about professional sports at the Forbes Iconoclast Summit last week in New York.
In March, JP Morgan was the financial adviser to Boston Basketball Partners in its sale of the Boston Celtics to an investor group, a deal that valued the franchise at $6.1 billion and marked the largest PE sports investment to date, noted Erdoes.
Still, it’s important for LPs in these sports-focused funds to remember that the holding period of a stake, majority or minority, of a professional sports team can be much longer than that of a typical PE-backed portfolio company. They’re certainly not the asset sustaining a fund’s IRR.
Money-making enterprises like youth sports leagues, sports wellness and recovery technology companies, and sports data analytics firms will comprise a large portion of Ariel’s fund and sustain the pace of distributions to LPs, Wright said.
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