Billionaires chase sports teams for access, scarce assets and tax breaks
Team ownership has become more attractive as media deals stabilize revenue and U.S. tax rules can soften the cost of buying in.
By Sofia Marchetti · World Affairs Correspondent
4 min read
Billionaires are paying record prices for sports teams because franchises offer status, rare business access and favorable tax treatment, according to David Silverman, a Cooley mergers-and-acquisitions partner who advised on the Boston Celtics sale. The rush matters because team prices are being pushed by scarcity and by financial structures that can make even expensive deals more appealing to wealthy buyers.
Fortune reported that recent entrants and established owners include Steve Ballmer with the Los Angeles Clippers, Mark Walter with a $10 billion purchase of the Los Angeles Lakers last year, Rob Walton with the Denver Broncos and a stake in the Arizona Diamondbacks, Arthur Blank with the Atlanta Falcons and Atlanta United, and LVMH chief Bernard Arnault with Paris FC.
Silverman told Fortune that ownership gives buyers access to a small network of powerful franchise holders and creates business opportunities that may not exist elsewhere. He cited Bill Chisholm, founder of the private equity firm Symphony, whose $6.1 billion purchase of the Celtics last year made him far more visible outside finance.
Silverman said Chisholm is now identified not only as a private equity founder but as the Celtics’ controlling owner. That public role, he said, can open doors through relationships and attention connected to the team.
Why team revenue looks steadier
Sports franchises have also become easier to underwrite because national media contracts provide long-term income, Silverman told Fortune. Those deals can help a club remain profitable even when attendance varies from game to game.
Silverman also said consumer demand for live events has strengthened the case for sports ownership. In his view, sports are well placed to capture spending from people seeking in-person entertainment.
Those factors have helped franchise valuations rise sharply over long periods, Fortune reported. The tax code adds another incentive: buyers can amortize assets such as media rights and depreciate other assets, including contracts and stadium-related property, to reduce taxable income.
Scarcity pushes prices higher
Silverman said the financial analysis of a franchise may not fully support the final price when a high-profile team becomes available. Buyers know another chance at the same asset may not come for years, so competition can lift bids above what the operating business would otherwise justify.
In the Celtics transaction, Silverman told Fortune, part of the financing came from allowing some existing owners to keep equity temporarily and exit in stages. That structure meant Chisholm did not have to fund the full purchase price in cash at closing.
Similar thinking is appearing across sports. Bloomberg reported that Apollo Global Management has been in talks over an investment of about $3 billion tied to the Steinbrenner family’s holding company, which controls the New York Yankees and also has minority interests in AC Milan, New York City FC and Legends Hospitality.
Fortune reported that Major League Baseball limits the amount of control private equity can take directly in a club. As a result, Apollo’s expected structure would use debt and equity at the parent-company level rather than a direct Yankees stake.
Silverman told Fortune that such an arrangement could give the Steinbrenner family liquidity across generations while preserving control, and could give Apollo exposure to a long-term asset with appreciation potential.
Soccer draws strategic backers
Silverman said the same logic is visible in soccer. He pointed to Blank’s support for U.S. Soccer’s new Atlanta headquarters as both civic-minded and connected to his interests in the Falcons and Atlanta United, because a stronger U.S. soccer market could support franchise values.
He also tied that pattern to billionaire Ken Griffin’s reported effort to help bring Mauricio Pochettino to coach the U.S. men’s national team. Silverman told Fortune that wealthy backers may have genuine enthusiasm for the sport while also seeing a long-term business case.
Even with the financial incentives, Silverman said emotion remains a major force. For some buyers, the chance to own a team in a sport they love can matter as much as the investment math.
This story draws on original reporting from Fortune.