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PitchBook Analyst Note: Sports Teams and Private Equity Pair Up

Q2 2021

PitchBook Analyst Note: Sports Teams and Private Equity Pair Up

May 13, 2021

This note was updated on November 17, 2021 to include analysis on another firm in the space. 

Over the past few years, professional sports leagues, including the NBA, MLB and MLS, have relaxed ownership rules to allow institutional investors to buy passive stakes in multiple franchises. A handful of private equity firms have followed suit by raising funds dedicated to purchasing minority stakes in teams and leagues. This latest analyst note unpacks what’s driving investors to turn their attention to a sports world that has historically been a tough ownership club to enter. 

Key takeaways
  • Lucrative media rights deals have continued to favor live programming, making pro sports ownership resilient to market downturns that could result in a drop in ticket sales.
  • Due to a lack of voting control and liquidity options, some buyers have received double-digit discounts when buying minority stakes in franchises, making the long-term possibilities for returns more compelling.
  • Over the past few years, leagues have embraced the fast-growing sports betting market and more recently NFTs, adding another layer of revenue beyond the typical income streams they get from owning a team.