Why Private Equity is Flocking Toward Pro Sports Franchises

If you are a remotely active sports fan, you have probably noticed a trend over the past decade or so: The frequent sale of pro-franchise stakes to private equity firms or buyers with institutional backing.

This is a stark departure from how pro sports used to operate. Teams and clubs were previously owned by high net-worth individuals, and in some cases, they were a family business. Those structures are now becoming less common.

Perhaps the biggest inflection point to date unfolded in the National Basketball Association. The Los Angeles Lakers are one of the most valuable franchises in all of sports. For nearly 50 years, they were owned by the Buss family. Then, in 2025, they were sold at a record $10 billion valuation to Mark Walter, who also owns MLB’s Los Angeles Dodgers, and more notably, who is the CEO and Chairman of TWG global, an investment and holding conglomerate.

At the time of the sale, the Lakers’ ownership structure was considered obsolete. The Buss family could not compete with the behind-the-scenes resources implemented by other teams flush with private-equity funds. It never quite impacted the Lakers’ appeal to the masses. They remain the most popular pro basketball team in the world and generate more betting volume at flagship sportsbooks like MyBookie than any pro franchise that exists outside the NFL’s bubble.

Believe it or not, this is the billionaire equivalent of gentrification. High net worth individuals and families are being pushed out in favor of richer institutions. And while many believe this is owed to pro sports ownership becoming more of a status symbol, the primary catalyst is something entirely different: It turns out pro sports is a better investment than the stock market.

The skyrocketing value of pro sports franchises like the Lakers, pretty much every NFL team, virtually any soccer club, etc. is not something people have ignored. But many have written it off as a bubble. Annualized growth will peter out. Everything is a bubble, after all.

This may be true. However, the concept of a bubble eventually bursting implies this is a trend being artificially inflated by short-term interests. That is not the case.

A.J. Perez recently looked into this phenomenon of private equity in pro sports for Front Office Sports (subscription required). As he notes, purchasing majority or minority stakes have become a much safer, far more profitable way for institutions to park and invest money:

“According to Pitchbook, since 2002, all four of the major U.S. sports leagues have performed better than the S&P 500, and in some cases by a very wide margin. Here are the leagues’ respective returns over the past 20 years:

• NBA: 1057 percent

• MLB: 669 percent

• NFL: 558 percent

• NHL: 467 percent

• S&P 500: 458 percent

“Valuations have held steady or risen since the start of the pandemic [a few] years ago, even as profits have fallen — a product of reduced schedules, crowd-size mandates, and a general concern over the spread of COVID-19.”

Like Perez alludes to, the global pandemic from around the 2019 through 2021 period is among the major catalysts for pro sports investments. Institutions came to see that live sports remained appointment-viewing generators of revenue, even during times in which crowd size was limited or eradicated.

At the same time, this revelation merely accelerated what was already happening. As Perez also notes, pro sports franchise valuations have been soaring for more than two decades. It was only a matter of time before institutional investors caught on.

If we had to guess, private equity’s role in pro sports isn’t going anywhere. On the contrary, it is more likely to continue spreading.

Right now, many pro sports leagues have a 30-percent stake limit for private equity firms. That number is not exact. It can range from 20 to 30 percent in the grand scheme. For the most part, though, these PE firms cannot own more than one-third of a team, club, franchise, whatever.

With so many teams pushing the envelope of valuations, operating costs and business models that now feature diversified portfolios like real estate and tech, we have to imagine this will change. At some point, perhaps even soon, private equity firms will be afforded the ability to control even larger stakes. Eventually, they will probably have the ability to bankroll complete ownership.

As to what that means for the teams and the product they deliver fans over the long term, we cannot be certain. But one thing’s for sure: Private equity in pro sports is here to stay.