Sports team valuations are surging as billionaire investors and private equity firms compete for scarce franchises, with advisers also citing live media demand and perceived resilience to artificial-intelligence disruption.
Former Disney CEO Bob Iger and venture capitalist Josh Kushner agreed this month to acquire a controlling interest in the Los Angeles Lakers in a deal valuing the NBA franchise at a record $12.5 billion.
The buying wave extends across major US leagues. Major League Baseball approved a $3.9 billion sale of the San Diego Padres, while the NFL moved closer to approving a $9.6 billion transaction involving the Seattle Seahawks.
The NBA’s Minnesota Timberwolves and the WNBA’s Minnesota Lynx were also sold in a $4.5 billion deal. The New York Yankees separately agreed to a $2.6 billion investment from private equity firm Apollo Global Management for a minority stake.
Sports investment banker Sal Galatioto said demand has reached levels he has not seen during three decades of negotiating team transactions.
He said buyers traditionally viewed franchises as scarce assets with long-term appreciation potential and now increasingly see them as a hedge against technological disruption.
Read: Lakers Sale: Josh Kushner, Bob Iger Agree to $12.5B Deal
Victor Matheson, an economics professor at the College of the Holy Cross, said professional sports may prove relatively resistant to AI disruption because the underlying product, live competition, remains difficult to replace.
Media rights have also strengthened franchise economics. The growing competition from Amazon, Apple and Netflix for live sports content, while legalised sports betting has created additional sponsorship and audience opportunities.
The limited number of franchises available for sale continues to support prices. Investors have also expanded across borders, with US buyers acquiring European football clubs and foreign capital entering North American sports ownership.
