Until recently, only ultra-wealthy families and business tycoons could invest in sports—a sector that catered exclusively to a select few. For the rest, the idea of owning a stake in their favourite or the fastest-growing sports team or franchise was beyond reach.
However, the market has shifted dramatically in recent times. The rising cost of running and growing a sports franchise, the globalisation of sports, the rise of digital media, the explosion of revenue from broadcasting rights, sponsorships, and merchandising, and loosened regulations that now permit institutional investors, private equity firms, and even retail investors to own stakes have transformed sports into a viable and lucrative investment sector for many.
These shifts have unlocked a new frontier in investment, providing investors seeking diversification and high returns with a doorway into previously out-of-bounds investment verticals.
How Private Equity Changed Sports
In 2005, CVC Capital Partners acquired a controlling stake in Formula 1, marking one of the first major private equity investments in professional sports. This investment transformed F1 into a highly profitable global entertainment powerhouse by securing lucrative broadcasting rights, sponsorship deals, and commercial partnerships.
Powered by substantial capital, F1 expanded exponentially, entering high-growth regions across the world like the Middle East and Asia and transforming from niche motorsport into a global commercial powerhouse.
This trend soon gained momentum worldwide. Notable private equity-backed acquisitions followed, including the Glazer family’s leveraged buyout of Manchester United and the takeover of UFC by a consortium led by Endeavour, KKR, and Silver Lake.
Recognising the benefits of opening sports ownership to a broader range of investors, the NBA took a landmark step in 2021 by embracing private equity financing. This move not only provided teams with new capital sources but also allowed investors access to a previously restricted market
Recent regulatory changes across major sports leagues have opened the door for institutional capital, making sports one of the fastest-growing sectors in private equity.
Over the past four years, MLS, NHL, and MLB have all revised their regulations to allow private equity ownership.
Key Drivers of Investment Growth
The surge in private equity interest is driven by shifts in the sports business model, allowing investors to go beyond the game and capitalise on diverse monetisation opportunities. These changes have significantly strengthened the industry’s investment appeal.
Streaming—Streaming has completely transformed sports broadcasting, introducing a new, lucrative way of delivering sports content. Its rising popularity and global appeal have expanded audience reach and increased the value of media rights.
Intellectual Property—Sports-related intellectual property, including broadcasting rights, archival content, and merchandising, is now highly monetizable, providing multiple revenue streams within a single sport.
Sponsorships—Long-term corporate partnerships, widespread brand exposure, and sponsorship-driven revenue growth make sports an attractive sector for investors and private equity firms.
Why Sports Investment is Attractive
Sports franchises have historically appreciated in value at a rate that often outpaces traditional stock indices like the S&P 500.
However, incredibly high growth returns aren’t the only reason why sports investment is an attractive domain. Here are some other reasons why the vertical is rapidly rising in popularity:
Diversification and Recession Resilience
Sports investments aren’t directly correlated with traditional equity markets, making it an excellent option for portfolio diversification. Further, the vertical is also relatively more recession-resilient than equity markets, thanks to long-term media rights deals and sponsorship opportunities.
Expanding Accessibility
New models such as fractional ownership and crowdfunding platforms are making sports investing more accessible to smaller investors. This shift is breaking its long-standing association with only the ultra-wealthy and opening the market to a broader range of investors.
Passion-Driven
Unlike traditional asset classes, sports investing allows individuals to be financially engaged in an industry driven by passion. Investors can experience a deeper connection with their favourite teams while capitalising on long-term financial growth.
Growing Revenue Streams
As previously explored, the sports industry is evolving with new monetisation opportunities—including streaming, digital broadcasting, sports betting, sponsorships, and intellectual property rights—enhancing its viability and appeal as a lucrative investment.
How Private Equity Investment in Sports Work
Private equity firms typically invest through structured deals where equity or debt is exchanged for a stake in a holding company or a joint venture tied to the sports organisation. The capital is then leveraged to maximise commercial revenue while allowing teams to retain control over operational decisions.
Investors generally realise returns through exits within five to ten years, either via asset appreciation or cash flow distributions from the organisation.
How to Invest in Sports
With Stryde, you can seamlessly access private equity funds and invest in the once-restricted sports industry. With low entry barriers and investor-friendly structures, the platform enables you to diversify your portfolio and elevate your investment strategy through alternative opportunities.
