We thought we’d give you another break from financial news and report on the only other thing that causes the same sort of euphoric highs and emotional devastation as the stock market: sports.
Today, a group of investors led by private equity titan Bill Chisholm agreed to buy the Boston Celtics for a staggering $6.1 billion. That figure blows the last NBA deal—the $4 billion acquisition of the Phoenix Suns in 2022—out of the water.
In fact, it’s now the largest acquisition in all of sports history, beating the previous record set by the NFL’s Washington Commanders when the team was sold for $6.05 billion last year. That’s a hefty profit for the Celtics’ current owners, Wyc Grousbeck and Steve Pagliuca, who purchased the team for a measly $360 million in 2002.
Private equity ♥️ pro sports
As if there wasn’t already enough pressure on the team from rabid enthusiastic fans to win a championship, there’s now an even bigger threat than an inebriated mob wearing green: private equity executives who are laser-focused on profits.
To put it into PE terms, these deals have a lot of synergy. Private equity is increasingly moving into the wide world of sports in an effort to diversify their portfolios, searching for assets that don’t lose value—and nothing is quite as valuable as a franchise with a rabid fanbase willing to shell out big bucks for tickets and merchandise no matter what the economy is doing.
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Throw in revenue from media rights deals, or build a sportsbook next to a stadium to tap into the sports-betting industry, and it’s no wonder that US sports teams’ valuations have outpaced the gains of the S&P 500 over the past few years, according to Pitchbook data.
As for the teams accepting private equity money, they can use those funds to revamp facilities, invest in a growing number of individualized streaming platforms built to replace aging regional sports networks, and stockpile cash to pay for marquee athletes.
That’s why 70 major North American sports teams already have some private equity ownership. Within the NBA, 20 out of the 30 teams have a PE connection, while over half of the teams in the MLB can say the same.
Zoom out: While today’s transaction is the biggest yet, it clearly won’t be the last. Just the other day, Sixth Street, which is investing $1 billion in the Celtics deal, snagged a 10% stake in the San Francisco Giants. Sixth Street already owns portions of the San Antonio Spurs, as well as soccer teams F.C. Barcelona and Real Madrid, according to the New York Times.
Maybe more of these deals means Neal will finally let us quit Brew Markets and start Brew Sports.—LB