The Next Billion: Unlocking the Future of Sports Team Valuations
Sports Valuations Are Skyrocketing—What’s Driving the Trend?
Over the past decade, professional sports franchises have witnessed explosive growth in valuations. Today, more than 130 teams globally surpass the $1 billion mark, fueled by surging media rights deals, strategic real estate investments, and increased institutional interest in sports assets. Yet, this meteoric rise prompts critical questions: Can this growth continue? And what will it take to sustain or even accelerate these trends?
Sports teams are no longer just athletic organizations—they’ve evolved into multi-dimensional enterprises. From media rights and real estate to fan engagement and financial engineering, the business of sports is as dynamic as the games themselves. However, maintaining the upward trajectory in valuations will depend on how well teams and leagues adapt to emerging challenges and opportunities.
What’s Behind the Rise in Team Valuations
1. Media Rights Remain the Backbone
Media rights continue to drive significant value for sports franchises, often accounting for over 50% of total league and team revenues. Traditional broadcasters and streaming platforms like Amazon Prime Video and Apple TV+ are fiercely competing for live sports content, creating a dynamic bidding environment. Sports content remains one of the few reliable ways to capture large, live audiences, offering stability and scale amidst rapid technological disruption.
Additionally, international markets provide untapped opportunities. The NFL’s expansion into Germany, the NBA’s growth in Asia, and the English Premier League’s success in turning international rights into its primary revenue stream highlight the importance of globalization. Teams and leagues that effectively leverage international media rights will drive future valuation growth.
2. Real Estate as a Strategic Asset
Owning stadiums is no longer just about game-day revenue—it’s about transforming the surrounding land into vibrant, year-round destinations. Developments like Hollywood Park in Los Angeles, Atlanta’s "The Battery," and Tottenham Hotspur Stadium in London showcase how mixed-use projects—blending retail, residential, and entertainment spaces—create diversified revenue streams. By combining sports with real estate, franchises are not only future-proofing their valuations but also establishing high-value, tangible assets that hedge against economic cycles.
3. Institutional Investors See Sports as Stable Assets
Sports franchises have become increasingly attractive to private equity and sovereign wealth funds due to their scarcity and the enduring nature of sports fandom. Institutional investment has introduced greater professionalization into team operations, enabling innovation in sponsorships, real estate ventures, and fan engagement strategies. Today’s franchises are no longer run like mom-and-pop operations. Instead, they are professionally managed enterprises with specialized roles, from chief innovation officers to data analysts and NIL coordinators, ensuring efficiency, scalability, and long-term growth.
4. Multi-Team Ownership Unlocks Scale
Ownership groups like Fenway Sports Group, Kroenke Sports & Entertainment, and City Football Group demonstrate the power of multi-team ownership. By sharing resources, streamlining operations, and leveraging best practices across their portfolios, these groups maximize efficiency and scale. Multi-team ownership not only drives financial growth but also enables broader strategic alignment, such as global branding and operational innovation.
What It Will Take to Maintain the Growth Curve
While the fundamentals remain strong, sustaining high growth rates in valuations will require innovative strategies that go beyond traditional revenue streams.
1. Reinvent the Fan Experience
The in-person fan experience is evolving. Teams are integrating cashless payments, augmented reality, and personalized engagement tools into stadiums to create seamless, high-tech environments. Beyond game days, stadiums are becoming multi-purpose venues, hosting concerts, e-sports tournaments, and community events. By reimagining the fan experience, franchises can deepen loyalty and unlock new revenue streams.
2. Expand the Fan Base
Growing valuations requires a focus on expanding audiences, not just increasing revenue per fan. This includes investing in youth sports participation and grassroots programs to cultivate lifelong fans. Additionally, leagues and teams must tailor strategies for international markets, such as Asia, Africa, and Latin America, where emerging middle classes offer untapped potential. Local heroes, region-specific sponsorships, and multi-language digital campaigns are essential for capturing these markets.
3. Insource Key Business Lines
To capture value currently leaking to third parties, leagues and teams are increasingly considering insourcing operations like ticketing, media production, and merchandising. While this shift requires significant upfront investment, it strengthens control over branding and revenue streams. For example, insourcing ticketing platforms allows teams to collect valuable fan data, enhancing personalized marketing and long-term monetization.
4. Build the Brand Beyond the Game
Sports franchises are evolving into lifestyle brands. Teams that extend their influence into areas like merchandise, media, and hospitality can create lasting connections with fans. The Golden State Warriors, for instance, have built a brand that transcends basketball, with a strong presence in merchandise and global fan engagement. Expanding into lifestyle products and partnerships amplifies cultural relevance and positions franchises as more than just sports entities.
Our Take
The rapid growth in sports team valuations over the past decade has been extraordinary, but sustaining this trajectory will require bold thinking and transformative strategies. While the largest franchises in leagues like the NFL, NBA, and EPL are already commanding immense valuations, the real challenge lies in finding new ways to drive growth.
The next wave of valuation increases will come from franchises that think beyond the traditional playbook. Teams must innovate by building year-round revenue hubs through real estate development, fostering grassroots participation to ensure future fandom, and capturing leaked value by insourcing critical business operations.
But the real opportunity lies in redefining what it means to own and operate a sports franchise. Franchises that integrate seamlessly into culture and commerce—by investing in international growth, lifestyle branding, and immersive fan experiences—will set the standard for the next generation of valuations.
At the same time, leagues and teams must balance immediate monetization with long-term sustainability. Globalization offers immense potential but requires patience and localized strategies. Similarly, insourcing operations or developing mixed-use real estate demands significant upfront investment but pays off in enduring value.
The question isn’t just about how much a team is worth today. It’s about how far they can innovate to grow tomorrow. The franchises that succeed will be those that dare to think beyond the game, redefining the boundaries of sports, commerce, and community.
What do you think? Share your thoughts in the comments and join the conversation.
With valuations soaring across major and niche leagues worldwide, have sports franchises officially outpriced individual and family investors? With team values doubling, tripling, and even quadrupling over the past five years, I anticipate a surge in institutional investment across professional—and potentially even collegiate—sports in the next 5-10 years. Firms like Blackstone, Ares, and Silver Lake are all following Arctos’ model of treating sports as a distinct asset class. This seems like the most viable path to preventing valuations from outpacing investors' willingness to spend.
I know Bain has a top-tier private equity group. What’s the consensus from clients on sports entities as a sustainable asset class? Do you see a future where institutions overtake individuals as the primary owners in professional sports?