Sports franchises attract record billions as PE structures bypass ownership caps

Mark Walter’s record $10 billion purchase of the Los Angeles Lakers and Bill Chisholm’s $6.1 billion acquisition of the Boston Celtics highlight a surge of capital flowing into professional sports. These deals reflect a broader trend of ultra-wealthy individuals and institutional investors treating teams as premium financial assets rather than vanity projects.

Long-term national media rights deals have transformed the underlying business model by decoupling team profitability from nightly attendance. Because revenue is now largely guaranteed, a franchise can stay profitable regardless of daily ticket sales. As consumers increase spending on live entertainment, franchise values have compounded at a pace few other asset classes can match.

Buyers also benefit from a highly favorable regulatory environment. Owners can significantly lower their tax bills by amortizing key assets like media rights and depreciating player contracts and stadiums.

Scarcity further inflates valuations beyond what traditional discounted cash flow analyses would support. “If they went and did a discounted cash flow analysis, they might not come to the number anywhere close,” said David Silverman, a mergers and acquisitions partner at Cooley who worked on the Celtics sale. “But they know it’s a competitive dynamic: if you don’t get it now, you may never get it at all.”

To manage these massive price tags, buyers are using creative structuring. Chisholm’s Celtics deal, the largest in NBA history, allowed some existing owners to roll their equity forward for a staged exit rather than requiring an all-cash purchase.

Private equity is now engineering similar complex structures to access this closed market. Apollo Global Management is reportedly structuring a roughly $3 billion investment in the Steinbrenner family’s holding company, which controls the New York Yankees, New York City FC, and stakes in AC Milan and Legends Hospitality. Because Major League Baseball caps direct private equity control, Apollo is combining debt and equity in the parent company rather than the team itself.

This approach solves a critical liquidity problem for legacy sports families. “Apollo has a long-term view about where their capital can be most useful in long-dated opportunities where there isn’t necessarily a path to liquidity in the near term, but a real chance for capital appreciation in the long term,” Silverman said. It gives families like the Steinbrenners generational liquidity without surrendering control.

Beyond the balance sheet, ownership grants access to an exclusive network that generates secondary business opportunities. “There are unique business opportunities that come from both being part of that club and being notable in that way,” Silverman noted. For founders like Chisholm, the visibility of controlling a marquee franchise opens doors that private equity alone cannot.