GBR Pro | Wall Street’s Winning Bet: The Rise of Sports Investments
Sports were never a major attraction for Wall Street giants to bother with. It's all change now.
How many of you reading this article have a favorite sports franchise (team for our non-American readers) owned in part or full by an individual or a conglomerate with heavy Wall Street influence?
For years, it seemed that any form of sport wasn’t really a worthwhile investment commodity. The men and women of Wall Street would only discuss sports based on their attendance at a weekend game and whether somebody had done well with a bet on sporting success or failure.
But we live in different times. Sport is sexy. Sport is a way to diversify a portfolio, build brand recognition, or make that ultimate leap and own your franchise if you have done well enough.
We only have to look at the recent deal between the Strategic Sports Group and the PGA Tour to get a sense of this new world order. We covered the deal in more detail earlier this week; if you want to read more about it, click here.
Breakdown Of The Major Individual Deals In Sport
The potential $3 billion investment in the PGA Tour is not the biggest deal by any stretch in professional sport.
Josh Harris, co-founder of private equity firm Apollo Global Management, paid $6.05 billion for the Washington Commanders, currently the largest deal that has been brokered. Not far behind is Rob Walton’s $4.37 billion purchase of the Denver Broncos. Walton, whose father co-founded Walmart, is estimated to have a personal wealth valued in the region of $72 billion, so the deal for the Denver Broncos is relatively small change to him.
Moving to the NBA, Microsoft CEO Steve Ballmer purchased the L.A. Clippers for $2 billion in 2014, which at the time was considered an overinflated price. But Ballmer’s investment has proven to be a shrewd one, as the Clippers are now valued at $4.65 billion.
It’s Not Just Individuals Getting Involved
Banks are also taking the opportunity to jump on the bandwagon and are quietly hoovering up deals wherever they are to be found.
Goldman Sachs launched a new sports franchise division to offer high-net-worth clients stakes in clubs, aiming to set itself apart with exclusive investment opportunities.
Goldman Sachs's focus isn’t purely in the U.S.; they also have investments in the UK and Europe based around the most popular sport in these parts of the world—football (soccer for our American reading friends).
Goldman Sachs’ reach in this area has extended to: