Sports teams have become a popular means for investors as team valuations continue to skyrocket—but investing in multiple teams is more prudent than investing in one team.
- A group led by Josh Harris is currently in the process of purchasing the Washington Commanders for $6 billion.
- At the same time, he is already a managing partner for the Philadelphia 76ers, New Jersey Devils, and Crytal Palace soccer team.
- Forbes reports that Harris owns a $4.65-billion sports empire that could expand further above $10 billion with the Commander’s purchase.
- He joins other investors in this strategy of creating “sports empires,” including Ted Leonis, who owns the Washington Wizards and Washington Capitals.
Why It’s Important
As we previously reported, sports teams have become a notable investment tool, and dozens of investment groups are pushing for every opportunity to purchase teams in America’s baseball, basketball, football, hockey, and soccer leagues, in addition to global football clubs. Sports teams continue to perform highly in tumultuous years, causing their price tag to skyrocket.
When major sports teams go on the market, they are becoming hot-ticket purchases. MLSE Holdings—which controls the Toronto Raptors and Maple Leafs—is looking to sell a partial share for more than $8 billion. Qatar Investment Authority is attempting to buy a share for more than $4 billion. RedBird Capital—which owns AC Milan, part of the Boston Red Sox, and part of the English Premier League Liverpool team—is attempting to invest in the Alpine Formula 1 team, which could grow its already $4 billion empire, Forbes reports.
“The lesson is pretty clear: If you have the capital, investing in a sports empire, as opposed to a single team, is a smart way to bundle assets that have historically increased in value but that are not tied to the fortunes of the economy or stock market like typical businesses,” argues Forbes’ Mike Ozanian.