The Rise of Private Equity in Sports Franchises: A Global Phenomenon

Private equity firms are making a splash in the world of sports ownership, with more and more teams welcoming them into their ownership ranks. While private equity funds can’t own an MLB team outright, they are allowed to buy minority stakes in ballclubs, opening up a new avenue for investment in the sports industry.

In recent years, private equity has shown a growing interest in investing in sports franchises, with the first transaction occurring in 2006 when three private equity funds bought French soccer team Paris Saint-Germain. Since then, the industry has increasingly sought to buy into trophy sports assets, with a series of sports-only private equity funds emerging.

Major League Baseball has been at the forefront of this trend, allowing institutional funds to buy stakes in teams. While there are limits on the percentage of ownership a private equity fund can have in a franchise, the appeal of investing in MLB teams is clear. Team values have been surging over recent decades, with the average MLB club now worth $2.64 billion—up 34% in just four years.

Private equity ownership in sports teams doesn’t have to be disclosed, but we do know that a number of teams have private equity investors among their ranks. Teams like the Boston Red Sox, Los Angeles Dodgers, Chicago Cubs, San Francisco Giants, Houston Astros, and San Diego Padres all have private equity owners involved in their ownership structures.

Overall, allowing private equity firms to invest in sports teams makes it easier for existing owners to raise money and for current limited partners to exit their stakes when needed. As the sports industry continues to evolve, private equity’s role in team ownership is likely to grow, shaping the future of sports ownership in the process.