2025 Perspectives in Private Equity: Sports

We continue to observe the growth of professional sports as an asset class, with private capital having transformed team investments in recent years from trophy assets to opportunities for significant growth.

Evolving ownership dynamics in sport are driving that trend, including shifting ownership rules in major U.S. sports leagues to permit private equity (PE) investment, a growing trend for minority investments, and the emergence of multi-team conglomerates to provide efficient scaling opportunities, revenue stability and asset diversification. PE investors have been attracted by the potential to diversify portfolios with largely uncorrelated sports investments at a time when the industry is experiencing significant growth driven by media rights, international expansion and new revenue models. Sports teams are also unique assets with passionate fan bases that offer intangible value beyond financial returns.

Below are several trends for private equity investors to look out for in sports in 2025:

Shifting Ownership Rules

Major U.S. sports leagues are increasingly allowing private equity funds to acquire minority stakes in teams, including ownership across multiple teams and leagues. In August 2024, the U.S. National Football League (NFL) owners voted to allow private equity funds to buy stakes in teams, permitting up to 10% to be owned by a certain permitted list of funds.

The NFL’s rules require that funds must hold assets for at least six years and must take at least a 3% equity stake in the team. Funds are permitted to purchase stakes in up to six teams, and the interests in the teams are purely passive and do not include voting or other control rights.

With owners keen to tap private equity funds for much-needed liquidity, the new rules have already produced several deals with Ares Management acquiring 10% of the Miami Dolphins (team valued at $8.1 billion) and Arctos Partners purchasing a 10% stake in the Buffalo Bills (team valued at $5.3 billion). We expect there to be significant activity as more teams complete transactions with investors.

Growing Interest in Women’s Sports

As women’s sports rapidly increase in popularity so too do valuations. For example, in the Women’s National Basketball Association (NBA), team valuations now exceed $200 million and expansion is underway following a $2.2 billion media deal negotiated as part of the NBA's national deals. There are predictions that at least one women’s team will hit a $1 billion valuation by 2030.

The National Women’s Soccer League is also growing fast and attracting private equity investments, while new leagues like the Professional Women’s Hockey League and League One Volleyball are poised to expand and attract significant interest.

We see emerging athlete-brand connections, growing traditional media opportunities and also superior social media engagement as women drive that more valuable demographic.

Peak audiences are growing and, outside the U.S., women’s football, particularly in the English Premier League, offers meaningful upside. In 2024, the new Women’s Super League began operating independently from the English Football Association, while operating teams continue to trade at very low valuations.

Transformation of College Sports

Once finalized, the National Collegiate Athletic Association’s antitrust settlement looks set to require athlete compensation and revenue sharing in U.S. college sports, potentially creating significant financial challenges for conferences and member schools. The change will create a sizable need for operating and investment capital, in turn driving significant interest from institutional investors.

We have already seen a Division One Super League proposal, proposing a 70-team “super league,” that would be funded largely by private capital—perhaps as much as $5 billion. More broadly, schools and conferences will be looking for operating capital and exploring ways to facilitate private equity investments into venues, facilities and NIL (name, image, likeness) platforms.

Media Shifts Creates New Revenue Streams

For most major U.S. and international sports leagues, more than half of revenue is derived from television broadcasting rights, which remain the key scalable revenue source. The value of sports franchises has skyrocketed in recent years and are inextricably linked to the availability of media dollars—the value of global sports media distribution agreements has risen from $24.5 billion in 2011 to more than $62.4 billion today.

The evolution of the sports media landscape poses challenges for U.S. league and team revenues. The Diamond Sports bankruptcy resolution has left a number of teams in the National Basketball Associations (NBA), Major League Baseball (MLB) and the National Hockey League (NHL) without local rights distribution, and while streaming services have become very active in acquiring sports rights, the future of local media rights distribution is still in flux.

The takeaway for investors is that demand for sports content remains high as competition between tech giants and traditional media drives up valuations for broadcasting rights and players like Warner Bros Discovery and Paramount+ reshape their strategies.

Streaming offers the potential for new revenue opportunities for leagues and teams, including subscription fees, advertising and even direct-to-consumer models. Netflix saw 60 million households tune into its first foray into live boxing in November 2024, when it streamed Mike Tyson taking on Jake Paul, and it is experimenting with streaming live NFL games. The serialization of sport is another trend to watch, with the Netflix documentary series Formula 1: Drive to Survive illustrating the potential to tap new fan bases through reality TV-style programming.

Growing International Leagues

While the majority of private equity funds focused on the sports opportunity set have so far tended to prioritize U.S. sports leagues and teams, the universe of investable sports assets continues to expand. In addition to women’s soccer in England, there are growing opportunities for private equity emerging across European football and an improving environment for investors seeking an entry point.

Elsewhere, the Saudi Pro League is gaining momentum following the arrival of big name soccer stars including Christiano Ronaldo and Neymar, while start-ups sports and leagues including Sail GP, the Professional Bull Riding Tour and the Professional Fighters League may yet offer meaningful opportunities for PE players to drive growth.