The Rise of Private Equity in Sports: The $10 Billion Lakers Deal and a New Era of Allocator Interest
Private equity has found a new frontier: professional sports. Once dominated by wealthy individua
The Rise of Private Equity in Sports: The $10 Billion Lakers Deal and a New Era of Allocator Interest
Private equity has found a new frontier: professional sports. Once dominated by wealthy individuals and family offices, ownership of sports franchises is now increasingly driven by institutional capital. The recent $10 billion sale of the Los Angeles Lakers stands as a landmark moment that highlights both the scale of opportunity and the shifting landscape of sports ownership.
The $10 Billion Lakers Deal: A Turning Point
In one of the most eye-popping transactions in private equity history, a consortium of investors led by a major PE firm acquired the Los Angeles Lakers for a staggering $10 billion. This valuation reflects more than just the Lakers' storied history and loyal global fanbase; it's a bet on the future of live entertainment, media rights, streaming, and global brand expansion.
Private equity firms see tremendous upside in owning iconic sports teams. The Lakers' global reach, coupled with emerging digital distribution channels, licensing opportunities, and sports betting integrations, create multiple avenues for value creation. Furthermore, with sports content remaining some of the most valuable live programming, media rights deals are expected to continue climbing. The NBA's next media rights deal alone could break records, driving even higher valuations.
Why Allocators Are Flooding into Sports
The Lakers deal isn't an isolated event; it's part of a broader trend where pension funds, sovereign wealth funds, endowments, and other institutional allocators are increasing their exposure to sports assets. Articles from The Wall Street Journal, Bloomberg, and Financial Times have all recently highlighted how institutional investors view sports franchises as "global content companies" rather than simple team ownership. Several reasons are driving this surge:
Stable, Predictable Cash Flows: Despite economic cycles, sports franchises often exhibit resilient revenue streams, driven by long-term media contracts, sponsorship deals, and ticket sales.
Scarcity of Supply: There are a limited number of elite teams available for acquisition, creating a supply-demand dynamic that supports long-term capital appreciation.
Diversification and Uncorrelated Returns: Sports franchise investments offer allocators portfolio diversification, as these assets are often uncorrelated with traditional public markets.
Globalization and Monetization Upside: Teams are aggressively expanding internationally, leveraging global fan bases through streaming, merchandising, and sponsorships.
Regulatory Changes: Many leagues, including the NBA, MLB, MLS, and European football leagues, have relaxed ownership rules to allow private equity and institutional capital greater access.
The Expanding List of Mega Deals
The Lakers transaction joins a growing list of blockbuster private equity plays:
Silver Lake's $500 million investment for a 10% stake in City Football Group (Manchester City)
Arctos Sports Partners acquiring stakes in multiple NBA, MLB, and NHL teams
RedBird Capital's $1.3 billion acquisition of AC Milan
CVC Capital Partners' €2 billion investments across rugby (Six Nations, Premiership Rugby), La Liga (Spain), and Ligue 1 (France)
Fenway Sports Group's $7.35 billion valuation after strategic investments including from RedBird and Arctos
Clearlake Capital's role in the $5.3 billion acquisition of Chelsea FC
These deals reflect a fundamental shift: allocators are no longer satisfied with indirect exposure through public markets or passive funds—they want direct ownership of globally recognized sports properties.
Dedicated Sports Funds and Direct Allocator Involvement
The market's enthusiasm is giving rise to dedicated sports investment vehicles. Firms like Arctos, Dynasty Equity, and Ares Management have launched specialized sports-focused funds, some of which are raising billions in dry powder to chase global opportunities. Sovereign wealth funds from the Middle East, such as Qatar Investment Authority and Saudi Arabia's PIF, have also signaled strong interest in expanding sports holdings, particularly in soccer, Formula 1, and golf.
Institutional allocators, including public pensions like CalPERS and large endowments, are exploring co-investments and direct deals alongside PE sponsors, effectively reducing fees and gaining more control over these scarce assets. According to a 2025 Preqin report, over 30% of institutional investors plan to increase their allocation to alternative sports assets in the next 24 months.
What Comes Next?
The $10 billion Lakers sale may prove to be just the tip of the iceberg. As valuations continue to soar, the blend of technology, global streaming, legalized sports betting, and the rising value of live content will drive even greater institutional involvement. Allocators are viewing sports franchises as durable, inflation-hedged assets with significant long-term capital appreciation potential.
Private equity is no longer just a player in sports—it is becoming one of the dominant forces shaping its future. The next wave of deals could involve entire league ownership stakes, innovative league financing models, and partnerships with major tech platforms to unlock global fan monetization. In this rapidly evolving landscape, the Lakers sale may ultimately be remembered not as an outlier, but as the start of a transformational decade for private equity in sports.