Sports teams are an asset class. Just not for you.

Why the rising prices of European football, F1 and the NBA aren't for minority investors.

One Number

Annualised return on Big-4 North American sports franchises (NFL, NBA, MLB, NHL) over 60+ years.  ·  ROSS-ARCTOS SPORTS FRANCHISE INDEX (RASFI)

A dollar invested in the average North American sports franchise in 1960 would be worth roughly $1,800 today. The RASFI index has compounded at 13.0% a year, outperforming the S&P 500 by 2.5 percentage points over the same horizon. Franchise values have added $270bn since 2019, against just $11bn of institutional capital available — according to Arctos. The question is who actually receives that 13%.

One Argument

Sports team valuations have been driven by scarcity buyers, not by operating fundamentals. The benefits go to the principal owner. The minority shareholder does not get them.

Sports as an asset class is real, and the growth is not a mirage. Top-5 European football leagues' revenue rose from €2.5bn in 1996–97 to €20.4bn in 2023–24, according to Deloitte. The top 20 clubs alone now generate €12.4bn — up 11% year-on-year. Real Madrid became the first football club ever to clear €1bn in revenue, two years running. Something has genuinely changed.

This growth has drawn much bigger institutional money. The Economist reports that in 2024 about 45% of all sports-industry deals were private equity driven. Sovereign wealth funds lead 24% of global sports investments, according to PwC Sports Industry Outlook 2025. More than 36 European football clubs have either private equity, venture capital, or private debt on their cap table, according to Deloitte. Goldman Sachs surveyed 245 family offices in 2025: 25% had already invested in sports, another 25% wanted to, and 71% were focused on men's major leagues.

This asset class is a top-of-pyramid story, not a broad-based one. According to BCG, media-rights value for the top 10 sports properties rose 113% between 2014 and 2024; the next 20 properties grew by just 40%. The top 10 are now worth roughly four times the next 20 combined.

The principal's bet is not the shareholder's bet. Quantum Pacific made 7x on Atlético Madrid since 2017. Mark Cuban returned 1,478% on the Mavericks — bought for $285m in 2000, sold at $4.5bn in 2023. The Lakers sold at $10bn last year; the Celtics at $6.1bn three months earlier. These are control-trade returns.

George Pyne, who founded Bruin Capital after running NASCAR and IMG, has avoided buying teams for ten years. His reasoning, in a recent FT interview: teams deliver 10–14% IRR with uncertain liquidity and uncertain value-add, while sports-business adjacencies — data, media tech, sponsorship services — target 25%. As the FT's Lex column has put it, sports teams are trophy assets, like mansions, yachts, and paintings; valuation targets are set on mostly-private sales of other teams plus a somewhat vibes-based premium or discount. The asymmetry is structural. The principal owner gets benefits that cannot be sold to anyone else — status, control, resale optionality. The minority shareholder pays for those same benefits in the share price but cannot use any of them.

Arctos makes the bull case most clearly in a September 2025 white paper by Andrew Baran and Sushaan Modi. Their argument: the price moves cannot be a PE-driven bubble, because institutional capital available was roughly $11bn at Q1 2025, against $270bn of value created since 2019. Ownership-rule changes, they argue, came in response to the fundamentals — not the other way around.

I accept that private equity is not the marginal price-setter. The marginal price-setter is the trophy buyer — sovereign wealth, family office, principal control — and the trophy buyer pays for benefits the minority shareholder cannot get. Arctos's own data shows RASFI returned 13.8% over 2019–Q1 2025, against the S&P's 14.4% over the same period. The bull case now rests on the scarcity premium continuing to expand. That is a bet on other people's preferences, not on cash flows.

One Position

If you want sports exposure in your portfolio, own the picks and shovels, not the teams. Adjacency businesses — data, media tech, sponsorship services — convert sports growth into cash flow at private-equity returns. Listed sports equities give you the team profile at adjacency prices. The 13% asset-class return belongs to the buyer with control. Everyone else gets only the bragging rights.

I am wrong if listed sports equities outperform their consumer-business peers on operating cash flow alone, without needing the trophy multiple to do the work.

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