Buy the Knicks in 2014 and you’d have beaten the S&P 500. Same for the Cowboys, the Rangers, the Bruins. Since 2014, total returns across the NBA, NFL, NHL, and MLB have run ahead of the index, per Fortune. The trophy case turned out to be the smaller prize.
So who’s cashing in? Not the season-ticket holder. The people who own the teams, and the private equity shops the leagues have let in the door. Franchises used to be rich men’s toys. Now they’re a line item in a fund. And the pitch writes itself: an asset that only a handful of billionaires can bid on, going up faster than the stock market.
The people cashing in on those returns are billionaires and private equity funds, because a $6 billion franchise isn’t something you buy a share of at your brokerage. But the door is cracking open. RSN blowups and league rule changes have let institutional money in, and a few funds that hold team stakes (Arctos, and Ares among them) are the closest most of us will get to owning a slice of the Cowboys. Watch for the first real sports-team ETF or fund that takes retail dollars. That’s when this trend stops being a spectator sport for you.
Owning a team beat the S&P 500 since 2014, sure. But the entry fee is a couple billion dollars and a phone call from Adam Silver, so the “asset class” is about 30 buyers deep. What trickles down to the rest of us is the minority-stake fund, where you pay 2-and-20 to own a sliver of something you’ll never control and can’t sell when you want out. The trophy was never the point for these guys. The private equity firms sniffing around figured that out years ago, and they don’t watch the games.
Sources: fortune.com
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