Introduction

Professional sports ownership has undergone a profound transformation over the last several decades.

Once dominated by wealthy individuals and families seeking prestige or community influence, sports franchises are now widely regarded as sophisticated investment assets.  Across major U.S. leagues, as well as international and emerging competitions, teams have become highly sought-after financial assets attracting private equity, family offices and other alternative investors.  This shift reflects a broader change in how sports franchises are analyzed, financed and valued.  No longer viewed simply as operating businesses driven by ticket sales and local sponsorships, teams are increasingly treated as scarce platform assets characterized by durable demand and supported by long-term media rights, loyal fan bases, global digital reach, licensing opportunities and, in many cases, related real estate development.  As a result, sports ownership has evolved from a model centered on trophy assets to one increasingly focused on growth, portfolio value and strategic scalability.

Sustained Franchise Valuation Growth Across Leagues

A defining feature of the modern sports economy is the steady rise in franchise values across major leagues, including the NFL, NBA, MLB, NHL, MLS and leading international sports properties.  Notably, this growth has persisted through multiple economic cycles, including periods of recession and market instability, due in significant part to scarcity.  Leagues strictly limit the number of franchises in operation, making teams rare assets with high barriers to entry and relatively few opportunities for new ownership groups to acquire them.  As buyer interest has expanded to include billionaires, investment groups, institutional funds and cross-border capital, competition for available teams has driven valuations higher.  Recent transactions reflect the scale of such appreciation.  By way of illustration, the Dallas Mavericks were valued at $4.50 billion in 2023 after having a majority stake purchased for $285 million in 2000, while the Denver Broncos sold for $4.65 billion in 2022, representing a 5,861% increase over their 1984 purchase price.  Governance structures, though varying by league, have also helped sustain franchise values; revenue sharing, salary caps, luxury taxes, drafts and centralized commercial arrangements reduce volatility and support long-term enterprise strength.  Commentators have likewise emphasized the resilience of sports assets through disruptive events such as the September 11 attacks and the Covid-19 pandemic, noting that fan attendance and viewership have remained durable even in periods of instability. Major North American sports leagues (NFL, MLB, NBA, NHL) have sought to augment franchise values through various international, digital and multi-use stadium initiatives. Key strategies include aggressive international game hosting, partnering with experiential technology for "shared reality" viewing, and developing new, technologically advanced, and taxpayer-supported arenas to boost revenue and fan experience.

Sustained valuation growth, however, is not without structural constraints.  Although franchise values have risen consistently, long-term growth assumptions increasingly must account for practical limits on consumer attention and spending.  As new teams, leagues and competitions continue to emerge, there may be a natural saturation point shaped by finite media windows, discretionary time constraints and competition across entertainment platforms.  As a result, league scarcity, brand strength and differentiated fan engagement may become even more important in sustaining franchise values.

Media Rights as the Primary Engine of Value

Media rights have become a primary revenue driver and a central determinant of franchise valuation.  Long-term broadcast and streaming agreements generate predictable, recurring revenue, and live sports remain uniquely valuable in a fragmented media environment by attracting large real-time audiences.  Because broadcast and streaming arrangements account for a substantial share of revenue across many major U.S. and international sports leagues, competition among broadcasters, streaming platforms and technology companies has driven rights fees higher, while centralized, league-negotiated media deals have further supported stable franchise economics across markets.  Global sports media rights agreements have likewise grown substantially, reflecting the broader rise in the value of sports rights in the United States and other major markets.  Streaming has also expanded the revenue model by creating additional opportunities through subscriptions, advertising and direct consumer distribution.

Questions remain, however, as to whether media rights valuations will continue to grow at historical rates or begin to stabilize as traditional broadcasters face financial pressure and streaming platforms reassess long-term profitability.  Although live sports content remains uniquely valuable, future rights increases may be more uneven across leagues, markets and formats, placing greater emphasis on contract structure, duration and downside protection than on pure fee escalation.  Nevertheless, media agreements continue to offer investors visible, long-duration cash flows that support franchise values and enhance the appeal of professional sports teams as long-term assets.

Private Equity’s Expanding Role in Team Ownership

For many years, major sports leagues either barred private equity outright or limited ownership to individuals and family groups viewed as better suited to long-term stewardship. Institutional capital was frequently met with skepticism across leagues, particularly due to concerns about leverage, short investment horizons, governance conflicts and reputational risk.  As franchise valuations increased, however, that model became more difficult to maintain.  Teams required larger pools of capital, owners sought additional liquidity and leagues grew more receptive to outside investment.  In response, several leagues adopted rules permitting private equity firms and similar investors to acquire passive minority stakes in teams.  The NFL, NBA, MLB and NHL have all amended their ownership policies to allow this form of minority private equity participation.  For example, the NFL recently approved a structure under which certain authorized funds may purchase passive interests of up to 10%, subject to minimum investment thresholds, holding-period requirements and restrictions on control and voting rights.  These developments reflect a compromise that allows leagues to access institutional capital while preserving centralized governance and owner oversight.  For existing owners, private equity offers liquidity without requiring a sale of control, and for investors, it provides access to a scarce asset class defined by long-term appreciation potential, limited supply and growing league revenues.  However, unlike traditional private equity transactions, sports investments rarely conform to standard buyout models, making customized legal and financial structuring essential.

Stable Returns and Portfolio Diversification

Sports franchises have attracted institutional investors not only because of their growth potential, but also because they are increasingly viewed as resilient, long-duration assets that provide meaningful portfolio diversification.  Unlike many businesses in the broader entertainment sector, teams benefit from stable underlying demand, multiple revenue channels and a consumer base defined by strong brand loyalty.  While annual operating results may fluctuate, franchise valuations have generally remained durable over time as a result of diversified income streams including media rights, ticket sales, sponsorships, licensing, premium seating and other commercial partnerships, many of which are backed by long-term agreements.  Just as important, sports teams occupy a distinctive place in consumer behavior; fans tend to remain loyal through losing seasons, economic downturns and generational change.  This emotional attachment is rare and provides sports brands a level of persistence that few other businesses can match.  For institutional investors, these characteristics make sports franchises attractive alternative assets, offering long-term appreciation potential and return profiles that have historically been less correlated with public markets than those of traditional operating companies.

Mixed-Use Developments and Real Estate Value Creation

Modern sports ownership increasingly extends well beyond the team itself.  Stadiums and arenas now frequently anchor large mixed-use developments featuring retail, hospitality, residential, office and entertainment space, allowing owners to generate value from year-round commercial activity rather than relying primarily on game-day revenue.  This model broadens the franchise investment thesis by linking team ownership to surrounding real estate and place-based commerce.  In many markets, venues serve as the centerpiece of live-work-play districts that diversify revenue streams, strengthen brand identity and deepen fan engagement.  For investors, these projects offer additional value through development rights, property appreciation, hospitality operations and integrated sponsorship opportunities.  However, such projects also introduce significant legal and structural complexity, often involving zoning and entitlement approvals, public subsidies, infrastructure agreements, tax incentives, joint venture arrangements and layered financing structures.

Women’s Sports and Emerging Leagues as Growth Assets

Among the most significant developments in the sports investment market is the rapid rise in popularity of women’s sports.  Greater media exposure, stronger sponsorship demand, rising attendance and the growing commercial influence of elite athletes have all contributed to a meaningful increase in the value of women’s leagues and franchises.  For investors, the appeal lies in the combination of relatively low entry valuations and substantial growth potential; compared with established men’s leagues, acquisition costs often remain lower, while audience growth and revenue expansion have, in many cases, outpaced those of more established leagues and franchises.  This growth is evident not only in market commentary, but also in rising valuations.  For example, following a $2.2 billion media deal, the WNBA has continued to expand and franchise values have reportedly surpassed $200 million.  Media rights are particularly important in this context, as many women’s leagues are still at earlier stages of commercial development and leave substantial room for future rights negotiations to drive additional valuation growth.

Emerging leagues present similar opportunities.  Although often involving greater uncertainty due to developing infrastructure, evolving governance and less-established revenue models, such leagues may also offer meaningful early-entry advantages.  Investors benefit not only from future growth, but also from the opportunity to take part in shaping league structure, commercial strategy and long-term capital formation.

The growth of women’s sports and newer leagues, however, has not eliminated structural challenges.  Many continue to face issues relating to compensation, labor relations and long-term economic sustainability.  Further, questions concerning player pay, revenue sharing and working conditions have gained visibility and may increasingly influence league governance, collective bargaining dynamics and investor perceptions as such leagues mature.

Governance and Regulatory Considerations

As institutional capital assumes a larger role in professional sports, governance and regulatory considerations become increasingly significant.  League rules, which vary by sport and jurisdiction, typically determine who may invest, the size and nature of permitted ownership stakes, whether investors may hold interests across multiple teams or leagues, transfer rights and the mechanisms for resolving disputes.  In this respect, sports franchises differ fundamentally from ordinary companies operating in open markets; they exist within controlled league systems governed by organizational documents, membership rules and collectively negotiated commercial arrangements.  Any investment in a sports team therefore must be structured not only around general corporate principles, but also around the specific regulatory framework imposed by the applicable league.

Sports transactions may also implicate antitrust issues, labor and collective bargaining considerations, securities concerns, tax structuring questions and cross-border regulatory challenges.  Minority investors must recognize that their rights are often more limited than in other asset classes, while controlling owners remain subject to ongoing league obligations and heightened reputational scrutiny.  Cross-border transactions add further complexity as professional leagues, including the NFL and NBA, continue to expand overseas games and other international initiatives, increasing the number of jurisdictions in which legal and regulatory issues may arise.   The rise of multi-team ownership structures and sports conglomerates further complicates the governance landscape by raising questions of scaling, diversification and centralized management across multiple sports assets.  Although sports ownership is becoming increasingly institutionalized, it remains a distinct asset class that requires legal frameworks capable of aligning sophisticated investment objectives with the unique governance structures of professional leagues.

Conclusion

The institutionalization of sports ownership marks one of the most significant structural shifts in the modern business of professional athletics.  Franchise valuations have climbed sharply, fueled by expanding long-term media rights, league-level economic stability, integrated real estate strategies and growing global demand.  Alongside these developments, private equity firms and other institutional investors have moved from the periphery to an increasingly central position within the ownership landscape.  As a result, sports franchises are now widely regarded as durable, high-value assets capable of generating long-term appreciation, portfolio diversification and enduring cultural relevance.  The rise of women’s sports and emerging leagues has broadened the opportunity set further, creating access to high-growth investment opportunities with substantial untapped commercial potential.  As the market continues to develop, legal and governance frameworks will remain central to its trajectory.  The future of sports investment will depend not only on capital inflows and commercial expansion, but also on the careful structuring of ownership rights, regulatory compliance and league governance.  Ultimately, the institutionalization of sports ownership reflects a fundamental transformation in how teams are owned, financed and valued.

Authors

Irwin A. Kishner, Partner; Co-Chair, Corporate Department; Co-Chair, Sports Law Group

Irwin A Kishner is a partner and co-chair of Herrick’s Sports Law Group and Herrick’s Corporate Department. Irwin has helmed numerous sports industry deals, including team acquisitions and dispositions; stadium and arena development; media contracts; internet and intellectual property rights; joint ventures; credit facilities; advertising, concession and sponsorship contracts; wagering matters; naming rights agreements; franchise transfers and financings sponsorship; personal seat licences; concessions transactions; and executive compensation and employment matters. Irwin has authored articles on prevalent issues in the world of sports, lectured at universities and on expert panels on a variety of sports issues, and is frequently quoted in the media. He also serves on numerous boards of industry organisations.

Daniel A. Etna, Partner; Co-Chair, Sports Law Group

Daniel A Etna is a partner and co-chair of Herrick’s Sports Law Group. Dan has significant experience in sports law, including the sale and acquisition of domestic, English and Australian sports franchises; stadium and arena development, construction and financing; and broadcast and digital media agreements. Dan advises on concession agreements, sponsorship and naming rights agreements, ticketing and personal seat licensing agreements, league-wide and individual team debt and equity financings, memorabilia sales agreements and sports-related joint ventures. Dan has counselled NBA All-Star and NFL All-Pro players in connection with their private investments. He has appeared in national media and has authored numerous publications, including scholarly guides and articles.

Jermaine A. Brookshire, Jr., Corporate Department and Sports Law Group Associate

Jermaine A. Brookshire, Jr. is an associate in Herrick's Corporate Department and Sports Law Group, where he delivers comprehensive counsel on corporate finance, strategic transactions, technology and commercial agreements, mergers and acquisitions, venture capital and debt financings, securities law compliance, corporate governance, and a wide array of general corporate matters. Jermaine's practice is distinguished by his compassion for his client's needs and his ability to guide clients through complex deal structures, negotiate high-stakes agreements, and provide practical solutions to legal challenges.

Jessie Root, Corporate Department and Sports Law Group Associate.

Jessie Root is an associate in Herrick's Corporate department and Sports Law Group. Her practice focuses on corporate and securities matters, with an emphasis on mergers and acquisitions, private equity transactions, fund formation, commercial finance and corporate governance across a variety of industries. Jessie supports clients by managing and conducting due diligence, structuring and negotiating transactions, drafting key agreements and ensuring adherence to applicable laws and regulations. She also provides counsel to borrowers and lenders in connection with commercial finance transactions.