Once the punchline of a billionaire's midlife crisis, sports team ownership has become a strategic move that professional investors are making in record numbers. For private equity (PE) firms, the sports industry has shifted from a passion-fueled endeavor to a credible, high-growth investment category.
Sports: The Unexpected Darling of Wall Street
Over the last decade, franchise valuations have soared, some by over 800% depending on the league and market size. What was once a slow-burn industry rooted in legacy ownership has evolved into a fast-moving marketplace. Global investment in professional sports jumped from under $10 billion in 2008 to more than $32 billion in 2023, reflecting a 220% increase. The number of annual deals? Nearly 160, up from just a handful.
What changed? A mix of media disruption, technology breakthroughs, and evolving league policies opened the doors for institutional capital to enter. Media companies, clinging to live sports as the last bastion of appointment viewing, are paying top dollar for rights. Streaming platforms want in. Tech has infused every layer of the sports experience, from ticketing and data analytics to broadcast innovations and AI-powered scheduling. And perhaps most importantly, major leagues like the NBA, MLB, and NHL now allow PE firms to hold minority stakes in teams, a sharp contrast to their previous restrictions.
A New Breed of Investor
This isn’t the hard-nosed, asset-stripping PE of decades past. Today’s firms are more patient, more strategic, and more aligned with long-term growth. They’re buying into the surrounding sports ecosystem - not just teams, but media production companies, analytics platforms, ticketing systems, and more. George Pyne, founder of Bruin Capital, sums it up well: sports have emerged as a standalone investment focus. His firm, for example, has invested in Box to Box Films and FairPlay Sports Media, helping shape how fans consume the game.
Even the NFL, long resistant to institutional ownership, is reportedly nearing a policy shift. That matters. Where one league goes, others often follow. Private equity’s presence is being formally recognized and welcomed by leagues that once resisted it.
Media and Tech: The Twin Engines of Growth
Cord-cutting fragmented the traditional cable bundle, and in doing so, elevated live sports to the glue that holds it all together. Media conglomerates are paying top dollar for exclusivity. Streaming platforms like Amazon Prime and Netflix, hungry for live content, are joining the bidding wars. It’s part of the reason why the NBA could triple its media rights fees in upcoming deals.
These dynamics have driven valuations to historic highs, with some franchises gaining 30 to 50% year-over-year depending on market trends and media deals. According to JPMorgan Chase, since 2004 average team values have climbed 1,176% in the NBA, 714% in the NHL, and over 500% in the NFL and MLB. PE firms, always on the hunt for growth assets, are taking notice.
Meanwhile, technology has transformed the field of play, literally. The NFL introduced Microsoft Surface tablets on the sidelines in 2014. Since then, AI, wearable tech, high-speed connectivity, and sophisticated data platforms have become table stakes. What was once a tradition-bound industry is now a sandbox for innovation.
Lessons from the Past, Eyes on the Future
Of course, private equity has dabbled in sports before. TowerBrook Capital Partners bought the St. Louis Blues in 2006, hoping to flip the struggling team like a distressed asset. It didn’t go well. The Blues were bleeding cash, and the investment floundered. At the time, most franchises ran like family-owned shops, hardly fit for institutional ownership.
But that was then. Today’s sports organizations are professionally run businesses with diversified revenue streams, media arms, tech partnerships, and global ambitions. The idea of sports as a "small industry" still exists in some circles, but those numbers tell a different story. Consider this: if the average NFL team is valued at $5.1 billion, that’s $163 billion in team value alone. Factor in the adjacent businesses, everything from media companies to tech providers, and the market quickly stretches toward the trillion-dollar mark.
Where PE Is Headed Next
The landscape continues to evolve. Women’s sports, once overlooked, are now a hotbed for PE investment. The NWSL recently welcomed Sixth Street, a major fund, as a majority owner of a new Bay Area team. College athletics is also drawing attention as it undergoes seismic changes related to athlete compensation, conference realignment, and an estimated $4 billion in annual media rights value across major conferences.
Skeptics point to the comparatively small total addressable market in sports versus sectors like real estate or biotech. But as scarcity drives value (there are only so many teams to go around), the stakes are rising. For many PE firms, the fear of missing out is as real as the potential upside.
The Stryde Perspective
At Stryde, we view sports as a uniquely positioned sector: one that blends passion, scale, and economic resilience in ways few industries can match. The influx of private equity capital signals that this industry is entering a new phase, one marked by innovation, strategic growth, and global expansion.
For forward-thinking investors, the message is clear: sports are more than just a game. They represent a timely and increasingly valuable opportunity.
