Billionaire families opt to buy sports teams over art, cars

The world of sports team ownership has undergone a significant transformation in recent years, evolving from a status symbol for the ultra-wealthy to a mainstream investment asset. According to a new survey by J.P. Morgan Private Bank, sports teams have become an attractive option for high-net-worth individuals, with 20% of billionaire principals of private family investment firms reporting ownership of controlling stakes in sports teams, up from 6% in 2022.

This shift is not surprising, given the increasing valuations of sports teams and the potential for strong returns on investment. The bank values U.S. and European franchises at around $400 billion combined, with the total value of sports mergers and acquisitions and investment increasing eightfold over the past five years. Media rights deals and sponsorships have been key drivers of this growth, making sports team ownership an appealing option for investors.

The Appeal of Sports Team Ownership

So, what draws high-net-worth individuals to sports team ownership? According to Andrew Cohen, executive chairman of J.P. Morgan’s global private bank, it’s not just about the potential financial returns. Many principals are motivated by a desire to be actively involved in the franchise, taking on board seats or playing a role in operations. This hands-on approach aligns with the trend of families seeking to be “active architects” rather than passive investors.

Additionally, sports team ownership offers a unique opportunity for family bonding and legacy building. Many principals report that owning a sports team brings their family together, creating a shared experience and sense of purpose. Female team owners, in particular, are driven by a desire to support women’s sports and “help level the playing field,” according to the report.

Investing in Sports Beyond Team Ownership

While the cost of acquiring a controlling stake in a sports team can be prohibitively expensive, even for ultra-high-net-worth individuals, there are other ways to invest in the sports industry. Joining an ownership group or syndicate to acquire minority stakes, investing in arenas, and making “sports adjacent” investments in data analytics or merchandising are all viable options.

Heavy-hitter family offices, such as Blackstone’s David Blitzer, often take a multi-faceted approach to investing in sports. Blitzer, who owns equity in all five major men’s U.S. sports leagues, has backed several sports firms this year, including a padel club chain and a betting app, through his family office Bolt Ventures. This diversified approach allows investors to spread their risk and capitalize on various revenue streams within the sports industry.

A Growing Trend

The growth of the sports industry has drawn investors beyond passionate fans, with many high-net-worth individuals recognizing the potential for strong returns and active involvement. As valuations continue to soar, it’s likely that we’ll see more investors entering the market, driving innovation and growth in the sports industry. Whether through team ownership, arena investment, or sports adjacent investments, the opportunities for high-net-worth individuals to get involved in the sports industry have never been more diverse or appealing.