How to Start Investing in Professional Sports Teams
Investing in professional sports teams gives fans the chance to mix business with pleasure. But they also attract savvy investors seeking diversification. Obviously being the majority owner of a big-time sports franchise is likely out of reach for all but a few. However, even your average accredited investors may participate in private equity deals that offer ownership shares of teams large and small, and some publicly-traded teams also provide ordinary investors with similar opportunities
If you want to invest in professional sports teams, a financial advisor can help you figure out how this investment can fit into your overall portfolio.
Investing in Professional Sports Teams With a Brokerage Account
Investing in professional sports teams through a brokerage account is one of the most accessible ways to gain exposure to the sports industry. There are a number of publicly traded companies that own or manage sports teams, which means any investor can become a team owner by purchasing shares. Here are four examples of both U.S. and European exchanges:
- Madison Square Garden Sports Corp. (MSGS): Madison Square Garden Sports Corp., traded on the New York Stock Exchange (NYSE) under the ticker symbol MSGS, owns and operates several professional sports teams including the National Basketball Association’s New York Knicks and the New York Rangers of the National Hockey League. The company receives revenue from team performance, media rights and corporate sponsorships, offering investors exposure to multiple sports markets.
- Manchester United PLC (MANU). Manchester United, one of the world’s most iconic football clubs, is a public company trading on the NYSE as MANU. Man U offers investors the chance to buy into its storied history and global fanbase and also tap into a rich revenue stream. The club generates income from broadcasting rights, merchandise sales and ticket sales.
- Juventus Football Club S.p.A. (JUVE). Juventus, another renowned football club, is listed on the Borsa Italiana under the symbol JUVE. With a strong presence in European football and a loyal fanbase, Juventus is known for its consistent performance both on and off the field. Investors can benefit from the club’s commercial partnerships, sponsorship deals, and success in domestic and international competitions.
- Olympique Lyonnais Groupe SA (OLG). Olympique Lyonnais, a prominent football club in France, is traded on Euronext Paris under ticker OLG. The club has a strong reputation for developing young talent and competing at the highest levels in European football. Investors can gain exposure to club revenue from player transfers, broadcasting rights, and matchday income.
Investing in Professional Sports Teams With a Private Equity Firm
For those with a higher risk tolerance and the means to qualify, investing in professional sports teams through a private equity firm can be another option. Private equity firms pool capital from investors to acquire stakes in sports franchises or related businesses. These investments are typically part of a larger portfolio, allowing investors to diversify their risk while gaining exposure to an alternative asset.
To participate in these investments, you generally need to be an accredited investor, which means meeting certain income or net worth criteria set by regulatory authorities. In the United States, an accredited investor must have an annual income of at least $200,000 (or $300,000 with a spouse) for the last two years or a net worth of over $1 million, excluding the value of their primary residence.
Private equity investments in sports teams can offer healthy returns, particularly if the team appreciates in value, secures lucrative broadcasting deals or performs well in its league. However, these investments also come with higher risks. They’re less liquid than publicly traded stocks and often require a long-term commitment.
Understanding the Financials of Professional Sports Teams
Sports teams’ financial health is influenced by team performance, revenue streams, market size and ownership structure among other factors. As with any business, a team’s balance sheet, income statement and cash flow statement help investors assess its profitability and long-term sustainability.
Special considerations for sports businesses include revenue from ticket sales, broadcasting rights, merchandise and sponsorship deals. Teams often generate reliable income from loyal fan bases. However, a team’s performance on the field can change everything, making it essential to consider the team’s competitive position and potential for success. Investors should also be aware of the team’s debt levels and capital structure, as high levels of debt can pose risks, particularly in downturns or periods of underperformance.
Another important aspect is the valuation of the sports franchise. Teams in larger markets or with a strong brand presence often command high valuations. Due to the enthusiasm for sports investing, it can be challenging to identify opportunities that are not overpriced compared to the likely returns.
Pros and Cons of Investing in Sports Teams
Like any investment, owning a stake in a professional sports team comes with both advantages and drawbacks. Understanding these can help you decide if it fits your goals and risk tolerance.
Pros
- Potential for appreciation. Team values in major leagues have historically grown significantly, thanks to rising media rights, sponsorships, and global fan bases.
- Strong fan loyalty. Sports teams benefit from dedicated followers, which can create reliable revenue from merchandise, tickets, and broadcast deals.
- Exclusive access. For private equity investors or minority owners, there can be unique perks — from VIP seating and events to insider access to team operations.
- Emotional fulfillment: For fans, owning part of a team they love combines passion and profit, creating a personally rewarding experience.
Cons
- High valuations. Entry costs are steep — even minority stakes can be prohibitively expensive, particularly in the top leagues.
- Illiquidity. Private investments in teams are hard to sell and may require holding for many years before realizing gains.
- Performance-dependent revenue. Poor team performance can hurt ticket sales, sponsorships, and overall revenue.
- Market and league risks. Shifts in local market economics, league policies, or competitive dynamics can impact team value and profitability.
Weighing these factors carefully — and understanding how they align with your emotional and financial goals — is key before investing.
Bottom Line
The sports industry provides two major avenues for portfolio diversification and potential growth. Those are through purchasing shares of publicly traded sports businesses or, for accredited investors, participating in private equity investments. Investing in professional sports teams can offer a combination of financial opportunity and personal engagement for both average investors and accredited investors. As with any financial investment, you should understand the financials and associated risks before committing your capital. When an investment has an additional emotional component, as sports teams can, due diligence can become even more important.
Investment Planning Tips
- If you want to build an investment portfolio, a financial advisor can help you analyze investments and manage them to reach different goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area. You can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you want to figure out how much of your portfolio you should put into sports businesses, or any other asset, SmartAsset’s asset allocation calculator can help you develop a strategy based on your personal risk tolerance and time horizon.
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