NBA star Carmelo Anthony is joining Isos Capital and its founders, WWE board members Michelle Wilson and George Barrios, to launch a $750 million sports-focused private equity fund, according to an investment deck reviewed by Sportico.
The fund, Isos7 Growth Equity Fund I, is focused on “meaningful” minority investments in teams, leagues and sports-adjacent businesses in North America, Europe and Asia, according to the deck. Based on information in the presentation—which is part of the company’s roadshow raising awareness of the venture among institutional investors—Isos7 wants to acquire control and non-control stakes of sports teams and leagues using the professional network and experience of the three partners to take advantage of the convergence of sports, media and entertainment.
Isos Capital declined to comment.
The fund is “primarily focused on global blue-chip team and league investments that can leverage Isos’ operational expertise to drive commercial value,” according to one slide in the presentation. Roughly 80% of the funds will be dedicated to those investments, with the remainder split between emerging sports and sports-adjacent businesses.
It is unclear if the Isos7 fund has secured the $750 million it targets. That amount is notable because it is the minimum fund size the NBA and MLB want to see for private equity funds buying a limited partner stake in one of their franchises.
Co-managing partners Barrios and Wilson formed Isos Capital after serving as executives at World Wrestling Entertainment for more than a decade, including as co-presidents from 2018 to 2020. After leaving WWE, they formed a special purpose acquisition company, Isos Acquisition, which raised more than $225 million in a 2021 IPO. The SPAC later took Bowlero—which owns the Professional Bowlers Association, the top-level ten-pin bowling tour, and about 300 bowling alleys—public in a transaction valuing the enterprise at $2.26 billion. The pair recently rejoined WWE as board members when controlling shareholder Vince McMahon returned to guide the company through upcoming media rights negotiations and a potential sale.
Anthony, who joins as partner, has been investing in early-stage media, consumer internet and technology ventures through Melo7 Tech Ventures. Through that firm, he was an early investor in DraftKings, ride-sharing outfit Lyft and mattress-maker Casper, according to data compiled by Crunchbase. Anthony, a 10-time NBA all-star in a 19-year career with teams including the Denver Nuggets and New York Knicks, played for the Los Angeles Lakers last season and is currently unsigned.
The Isos7 fund joins a growing segment of institutional investors who aim to capitalize on the importance of sports media rights and intellectual property in a shifting landscape for fan consumption. Institutions are also drawn to the track record of sports properties outperforming equities markets while offering lower correlation to stocks—that is, their values tend to move less in line with stocks than other asset classes, a feature coveted by money managers looking to reduce risk.
From 1996 through 2021, the S&P 500 increased its value by a factor of 6.4, while the average NFL and NBA franchise grew nearly 20 times its value, MLB 17 times and the NHL 12 times, according to data compiled by Sportico. Most recently, teams in the Premier League, NFL, NBA and MLB sold at record league values, with expansion fees for emerging leagues, such as the NWSL, also growing at strong rates.
For leagues and current team owners, allowing institutional investors to buy in deepens the pool of potential buyers beyond billionaires longing to own their hometown teams. While the world’s billionaires have almost $13 trillion of collective assets, that’s just one-tenth of the assets commanded by the world’s private equity funds, sovereign wealth funds, pension funds and insurance companies, who invest to cover their policies. Getting just a portion of that group to open to sports ownership can help lift franchise values even more. That’s why the NBA recently widened the group of institutional investors that can buy into a franchise beyond private equity to include wealth funds and endowments as sources of capital.
Institutional investors would also improve the market for non-controlling stakes in teams—minority ownership positions that come with high price tags due to increasing team values. Selling a limited partner position in a franchise can take many months since minority ownership has little of the glory with which being the primary owner comes. Plus, private equity funds aren’t going to argue over parking spaces and getting extra seats for big games.
