Private equity firms are opening new doors for accredited investors seeking exposure to professional sports franchises, an asset class traditionally reserved for billionaires. As major leagues including the NBA, NFL, and NHL continue to relax ownership restrictions, private equity ownership in sports teams has surged, creating investment vehicles that allow qualified individuals to participate in minority stakes across multiple franchises.
Firms like Arctos Partners and CAZ Investments now manage funds that hold minority interests in teams ranging from the Golden State Warriors to the New York Giants. These funds typically require minimum investments of $1 million or more and are restricted to accredited investors who meet specific net-worth requirements.
Why Private Equity Ownership in Sports Attracts Investors
Professional sports franchises have demonstrated remarkable resilience through economic downturns, pandemics, and labor disputes, according to industry analysis. Modern teams generate revenue through multiple durable streams that extend beyond game-day outcomes, including media partnerships, licensing agreements, sponsorships, and real estate development surrounding stadiums.
The financial performance of sports franchises has outpaced traditional market indices over extended periods. According to data from Pitchbook, Sportico, and Forbes, NBA teams saw valuations grow 852% from 2002 to June 2020, compared with 548% for MLB teams and 472% for NFL teams. During the same period, the S&P 500 grew 334% when accounting for reinvested dividends.
Media rights deals continue to drive substantial value for team owners. Broadcasting partnerships and exclusive streaming programs generate consistent revenue regardless of on-field performance, while licensing and merchandising create recurring income streams from both physical and online sales channels.
Leading Players in Sports Private Equity
Arctos Partners has positioned itself as one of the most active firms in this space, building a diversified portfolio of minority stakes across multiple leagues. The firm holds ownership interests in teams including the Golden State Warriors, Sacramento Kings, and Pittsburgh Penguins, among others. Arctos markets itself as a long-term capital partner providing liquidity solutions to existing owners while benefiting from league-driven scarcity and media rights growth.
Meanwhile, CAZ Professional Sports Ownership Funds offers accredited investors access to professionally managed portfolios of minority interests in professional sports teams. Some offerings include options to customize allocations toward specific leagues such as the NFL.
Fund sponsors typically underwrite these investment vehicles targeting net internal rates of return between 15-20% over extended holding periods, though specific fund performance data is not publicly reported. These projections reflect the long-term appreciation potential and diversification benefits that sports franchise ownership can provide.
Understanding the Risks of Sports Franchise Investments
However, investing in sports-focused private equity funds carries significant considerations that potential investors must evaluate carefully. These investments are typically illiquid with multi-year lockups and limited redemption options, requiring capital to remain committed for extended periods.
Returns are not guaranteed, and various factors can negatively impact performance. Poor team performance, labor disputes between leagues and players, or reputational issues involving team ownership or athletes can all affect franchise valuations and investor returns.
Additionally, access to these funds remains restricted. Most sports ownership funds are not broadly marketed and are available only through registered investment advisors, private banks, or family offices with established relationships with the underlying private equity sponsors. The high minimum investment thresholds and strict accreditation requirements effectively limit participation to high-net-worth individuals and institutional investors.
For qualified investors who can navigate these barriers, sports private equity offers exposure to a unique alternative asset class combining scarcity, diversification potential, and long-term value appreciation. Industry experts recommend that interested investors work with financial advisors or family offices experienced in evaluating private sports funds to assess whether these investments align with their long-term financial goals and risk tolerance before committing capital.
