One of the realities of trying to invest in a sports team is that you can’t tinker with every day. Just ask Todd Boehly, minority owner of the Los Angeles Lakers and Dodgers, and president of Eldridge.
Speaking as part of SporticoLive “Invest in sport” summit, which will air online starting Thursday at noon ET, Boehly says professional sports are like no other business – humiliating because you can do everything right and fail, but exciting because there are no guarantees. Some might say the same for investing in the industry, which continues to see new waves of capital and growth opportunities.
“Winning is precious,” said Boehly, who joined O’Melveny’s sports industry group co-chair Chuck Baker for a panel discussion titled “Nurturing Global Sports Brands,” moderated by Sportico Editor-in-Chief Scott Soshnick. “Once you start earning more, and with regularity, you will have more opportunities to associate with equity and brand. “
These associations and relationships are more imperative than ever as the landscape experiences a historic explosion of new capital across franchises, leagues and infrastructure. Despite the financial fallout from the pandemic, there has been an unparalleled collection of deals. The latest investment category includes a host of new names including athletes, celebrities and media moguls.
But perhaps the most interesting wrinkle has been the increase in private equity funding, with several examples of sports and physical education coming together, like Elysian Park Ventures and the Dodgers.
Arctos Sports Partners, a sports private equity fund, is also a leader in the space, with stakes in the Golden State Warriors, Sacramento Kings and Fenway Sports Group (mother of the Boston Red Sox, Liverpool FC and Roush Racing). Ian Charles, Founder and Managing Partner of Arctos, says it takes unconventional thinking, coupled with changing league statutes, for these investments to thrive at the highest possible level, which in turn increases valuations even further. sports franchises.
“There is so much potential growth in this ecosystem today,” said Charles, who joined Arctos co-founder David O’Connor for a panel discussion titled “Private Equity Investments in Professional Sport” , moderated by Sportico’s Brendan Coffey. “Bringing in growth capital can help these assets reach their potential growth, which can sometimes be limited by internally funded growth. “
Some of the current trends in sports investing are probably there to tell it. Allen & Co CEO Steve Greenberg said there is a new market for sponsors, from institutions to wealthy families, which he says is in its infancy. Greenberg added that pent-up demand took into account some recent sales, with similar deals likely stabilizing after 2022.
Regardless, the increase in investment from the private sector and large corporations has impressed even the most experienced sports bankers.
“I have seen a flood of new capital come into the sector which historically has never thought of investing in sports assets,” said Colin Neville, partner of the Raine Group, during a roundtable on bankers , hosted by Sportico’s Eben Novy-Williams. “So it’s definitely going to get more competitive, but as always, the cream is rising to the top. “
A range of topics were covered during the summit, from what prompted Arctos to be aggressive in buying limited franchise stakes, to how e-commerce mogul Marc Lore and Alex Rodriguez secured the owned by the WNBA’s Minnesota Timberwolves and Minnesota Lynx.
“Sometimes the best negotiating strategy is not to negotiate at all,” Lore said.