Weekly Column: Hidden Asset Class-Sports Teams as Financial Vehicles

In this week’s column, California Sports Lawyer® CEO, Founder, and Managing Attorney Jeremy M. Evans writes about the role of financing and investment in professional sports franchises and what that might mean for the future of sports.

The value of professional sports franchises have risen mainly with the price of licensing to secure copyright to broadcast and stream games.

You can read the full column below. (Past columns can be found, here).

How did sports franchises become high-yield, low-supply investments? Professional sports franchises and their college counterpart brands are worth more today than ever. This column will explore how even a minority stake in a big four or five professional sports franchise or even a college program can be very profitable.

Sports franchises are no longer passion projects and just for civic pride. Sports franchises are now sophisticated financial businesses and investments that often have investment arms that go well beyond the team. Sports franchises in the National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), National Hockey League (NHL) and five franchises in Major League Soccer (MLS) (LAFC, Inter Miami, LA Galaxy, Atlanta United FC and New York City FC) all have valuations north of $1 billion dollars. Investors are now multi-billionaires or minority owner millionaires.

The value of professional sports franchises have risen mainly with the price of licensing to secure copyright to broadcast and stream games. As valuations have gone up, the need for private equity, family offices, and sovereign wealth funds have all become necessary to compete and to afford purchasing stakes and investment. The financialization of sports by an increase in valuations preceded the professional sports leagues changing league rules to allow private-equity stakes. The Los Angeles Lakers (NBA) for example just sold for $10 billion dollars to Mark Walter, a Guggenheim executive.

Sports franchises have diversified portfolios that go into real estate, technology, artificial intelligence, security, parking, and much more well beyond the teams arena, field, or stadium. It makes sense that investment groups like RedBird Capital and Sixth Street have multiple ownership stakes across leagues and continents. It is also of no surprise that some owners purchase and own multiple franchises (e.g., Mark Walter owning the Los Angeles Dodgers, Los Angeles Lakers, Chelsea FC (UK), and the Cadillac Formula 1 team.

Beyond the cost of media and purchasing live sports rights to broadcast and stream team games, professional sports franchises are valued upon (1) scarcity, as there are only a finite number of franchises where demand exceeds supply and they are very popular and well-known entities. (2) Revenue diversification: media rights, global merchandising, stadium/venue ownership, parking, sponsorships, data monetization through sales to companies like Sportradar, and other non-team events and games (e.g., renting out the venue). (3) Brand power: Teams function as enduring global brands, often outlasting other corporate entities. (4) Again, media leverage: live sports remain the most valuable television and streaming property, driving both subscriber and ad revenue. NFL programming consistently outpaces all programming and live sports dominate viewership. Game 7 of the 2025 World Series just pulled 27.3 million viewers, 50% more than game 7 of the 2025 NBA Finals. Interestingly, average professional sports franchise valuations have outpaced the S&P 500 over the last decade.

Professional sports franchises are not without risk and hidden costs, but government subsidies and outside investments have help franchises build stadiums and funding based on civic pride and other reasoning. Winning teams almost certainly result in higher revenues and valuations. If a team consistently loses through, it could see fan alienation, bad or cancelled television deals based on viewership (e.g., Regional Sports Networks), and governance conflicts between leagues, teams, owners, and politicians and authorities, and irritated fan bases.

With Tom Brady as proof, even multi-millionaires can have difficulty in securing an investment because of league and owner approvals and the amount needed to invest. Brady is someone who loves football and has a bright mind for the game and business, but what about investors that consider teams as "assets under management" as opposed to sports-first? Can sports conceivably become more profitable, but less personal? Unlikely if the teams keep on winning and fans support them, but ask the Cleveland Indians in the baseball classic film Major League if ownership can be too distant and unruly.

Current team structures resemble private-equity and hedge-fund models with debt financing, preferred shares, and management fees. Legal compliance can become dense and restrictive. Will the financialization of professional sports franchises make teams stronger global brands or hollow out their soul as community institutions? The hopeful thought is that fans will continue to love their teams and the players will continue to play, while money and investment is a financial vehicle that helps drive the team to success. The truth is, significant financial investment is needed in sports today just to survive let alone thrive. The cost of doing sports business is simply to high to avoid it.

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.