Scarcity brings desirability. Consider: there are some 2,700 billionaires in the world. That’s an elite group, but every one of them could own an apartment overlooking Central Park, dock their megayacht in Monaco and secure a reservation at Denmark’s Noma. But there are only 32 NFL owners and just 32 NHL franchises. The NBA and MLB are slightly more exclusive, at 30 teams each. Then there are maybe a dozen top-notch soccer clubs with global fanbases. Even among the nine-zero crowd, only a sliver can get themselves onto the other side of sports’ velvet rope.
“These are once-in-a-lifetime opportunities, so you’re going to have, I think, a lot of interest,” Gordon Saint-Denis, managing director of sports finance at Monroe Capital, said in a phone call. “Especially if it’s something in your backyard that you really want, you may not see that asset come up for sale again for another 20, 30 years.”
But the current market challenges the scarcity pitch. Right now, there are $16 billion worth of teams for sale, based on the most recent Sportico valuations. This bounty includes clubs in the NFL, NBA, NHL, MLB and English Premier League where, in each, the most recent sale fetched record bids. Those prices ranged from $900 million for the Pittsburgh Penguins to $4.65 billion for the Denver Broncos. The Brooklyn Nets set the NBA record in 2019, when Joe Tsai bought the team and its arena for $3.3 billion. Plus, there is a clutch of other European soccer clubs perpetually rumored to be listening to offers, from financially troubled Inter Milan, one of Italy’s top clubs, to London’s Tottenham Hotspur. With all that supply coming after decades of surging sales prices, is it finally a buyer’s market?
“We continue to have tremendous scarcity value in the five major U.S. leagues and in Europe for high-quality assets,” Chuck Baker, co-chair of Sidley’s entertainment, sports and media industry group, said in a phone call. “I believe that there are still tailwinds behind these sports—both men’s and women’s—that media rights fees will likely continue to increase. And the opportunity to globalize some of these name brands that haven’t been fully globalized, like a Chelsea, will continue,” said Baker, whose firm represented the buyers for the Premier League’s Chelsea. “Given the current market, I don’t think there was anything crazy or unusual about the price paid for Chelsea or the price paid for the Broncos.”
The feeling among half-a-dozen buy-side participants interviewed by Sportico, some not for attribution, is that plenty of buyers will appear. Some of them will be bidders who lost on recent sales and are eager to get another chance to attend the ball—Chelsea had 200 bidders and a final group of four serious contenders, for instance. Another cohort will be institutional investors—like pension funds, insurance companies and hedge funds—who see sports teams as an asset with low correlation to stocks and which benefit from having a longer time horizon.
“What’s different is there is a new class of buyer, potentially, with private equity firms,” Shawn Quill, national sports industry leader at KPMG, said in a phone call. KPMG assisted Clearlake with its involvement in buying Chelsea this year. “Traditionally, buying a team was like buying a home—you hope to extract value from it 30 years later when you sell it. Now a lot of buyers aren’t just looking at that but how to extract value in-flight. What are the assets that are under-leveraged that could perform better? That change in perspective changes the pool of prospective buyers.”
One potential catch is that institutions can only own minority stakes in North American teams and nothing at all in the NFL. Some funds, too, will sit on the sidelines in a control sale, since buying a limited partner stake at a control sale means paying the full valuation, whereas individual LP sales usually come with a non-control discount of up to 35%. Still, there is plenty of fund money that needs a home: Three new sports funds have raised more money this year than all of private equity invested in sports in 2021.
“At the Sportico conference in New York a few weeks ago, you could just feel the energy in the room,” said Saint-Denis, who has represented bidders on NFL and other franchises. “It was palpable—about the institutional money coming in, new ownership coming in. There are all these teams on the market and there are a lot of people circling. There is a lot of interest, notwithstanding the increased values.”
There are also plenty of marquee names floating up, from Jeff Bezos and Jay-Z, who are reportedly willing to partner on a bid for the Washington Commanders, to Ryan Reynolds, who may desire to add the NHL’s Senators to his portfolio, which includes English soccer’s Wrexham. “There are still more buyers than there are opportunities—and there are a lot of newly minted billionaires,” said Baker.
All those factors have most insiders predicting another banner round of bidding, especially if one or more clubs get pulled from the market. “We’re going to see new records and team franchise values that are sold,” said Quill. “So the real question is, for the buyer, is this a sound investment? Can I extract value out of different areas? The whole area of data and analytics, the infusion of technology, is definitely transforming sports. How you can recalibrate your assets across media, infrastructure, sponsorships, et cetera, to really leverage that data?”
Those factors will be weighed by bidders on the following clubs, listed here in order of most valuable to least, according to Sportico.
Washington Commanders
The average NFL team is worth $4.14 billion, and the Denver Broncos just set the record for priciest sports team ever with Rob Walton paying $4.65 billion this summer.
Why is it being sold?
The pugnacious Dan Snyder, who owns the team with his wife, Tanya, has agitated fellow owners, who are starting to speak publicly about their desire to see the team sold. Add a federal investigation into alleged financial improprieties and the pressure is on. The catch? It may not be for sale: The club has stated it is exploring “potential transactions,” which could mean Snyder is seeking to sell minority stakes to pay off some debt.
Why the team could sell for a premium:
Prior to Snyder buying the team for $800 million in 1999, one could credibly argue the Washington franchise was the crown jewel of the NFL. A confident buyer could see themselves getting the D.C. franchise to again challenge the Cowboys for the NFL’s most valuable. A new stadium can boost revenue, too. FedEx Field will be 30 years old when the teams’ deal to play there expires in 2027.
Liverpool F.C.
Liverpool is probably worth $4.14 billion, according to the Premier League valuations from Sportico. Fellow “Big Six” Premier League member Chelsea sold for $3.16 billion to a consortium including Clearlake and led by Todd Boehly (Dodgers, Lakers, Sparks part owner), a record for a soccer team.
Why is it being sold?
John Henry’s stewardship of the club avoided the missteps of other American EPL owners—drawing money from the club, not winning enough—until the aborted Super League concept forced Henry to apologize to the fanbase. Booking a “10-bagger” return on his investment likely is incentive, too.
Why the team could sell for a premium:
Chelsea came with stadium hurdles—renovation is tough in its dense neighborhood and the team loses the right to the Chelsea F.C. name if they leave Stamford Bridge. Liverpool doesn’t have those limitations. Plus, polls this year suggest Liverpool is the most popular Premier League squad in the U.S.
Los Angeles Angels
The average MLB team is worth $2.31 billion. The last sale was in 2020, when hedge fund billionaire Steve Cohen paid a baseball record $2.42 billion for his favorite team, the New York Mets.
Why is it being sold?
Arte Moreno was on track to capitalize on the latest trend among teams—developing mixed-used real estate around their stadiums—when a federal investigation into how his deal evolved scuttled plans.
Why the team could fetch a premium:
Sure, the Angels have two of the game’s most exciting players in Mike Trout and Shohei Ohtani, but the possibility that a new owner can revive the plan to acquire and develop hundreds of acres around Angel stadium could make the calculus of paying up for the franchise make sense.
Washington Nationals
The Nationals anchored the revival of the Navy Yard section of the nation’s capital after moving to D.C. from Montreal in 2005. The District is the sixth largest metro area in the U.S.
Why is it being sold?
The Lerner family isn’t committed to selling: They retained Allen & Co. to help them explore alternatives. But an aging patriarch (Ted Lerner is 97) often triggers multiple factors that encourage a sale.
Why the team could fetch a premium:
Resolving a long-running dispute over regional TV rights fees—the owners of the neighboring Orioles own the network broadcasting Nats’ games—could improve the math. Also, a good team fills the seats: The team averaged more than 2.5 million fans a year when contending for its division last decade.
Phoenix Suns
The average NBA franchise is worth $2.58 billion. The last sale came in late 2020 when the Utah Jazz sold to tech entreprenuer Ryan Smith for $1.66 billion.
Why is it being sold?
Attorneys found that owner Robert Sarver oversaw a hostile work environment and uttered racial slurs multiple times. The NBA quickly suspended him.
Why the team could fetch a premium:
The league will negotiate a new U.S. TV deal after the 2024-25 season, with a potential 200% rise in fees targeted by owners. Power brokers such as Larry Ellison and Bob Iger have been mentioned as prospective NBA owners who could be bidders.
Ottawa Senators
The average NHL team is worth $1.01 billion. The Penguins sold last November to John Henry’s Fenway Sports Group for $900 million.
Why is it being sold?
Owner Eugene Melnyk died in March, leaving his team to his two children, both of whom are under 25.
Why the team could fetch a premium:
A better-than-average hockey market with a young, talented team, the Senators should be competitive for years to come. A new arena in the city—replacing the current no-frills facility well outside town—would improve its economics.