How much does it cost to buy a sports team?

The millionaires and billionaires who own sports teams will not feel the hardship, whether it is the cost of running the business or the final price when it is sold.

DENVER – Inflation won’t hurt the bankrolls of sports team owners.

While the super-rich have to pay a little more for their eggs at the grocery store — just like everyone else — inflation is unlikely to hurt their sports real estate bottom line.

“I pretty much rest when I’m an owner,” said Tim Clarke, a senior analyst at PitchBook, which studies private financial markets. “That’s how people see the merits of the professional sports industry. They just don’t go under.”

Inflation rose this year to levels not seen in four decades, slowing the economy and driving up prices for consumers from checkout to pump. Sport is usually no exception: rising costs make things more expensive fans go to gamesfor families who participate in youth sports and for college athletic departments try to stay on budget.

But the millionaires and billionaires who own a sports team won’t feel the hardship, whether it’s the day-to-day cost of running the business or the selling price, if they decide to move on. On the contrary, a franchise can be a safe place to park money and weather a bear market.

“I think there’s a kind of hedge,” said Rob Tillis, CEO of Inner Circle Sports, who has worked on the sale of dozens of teams in all four major US professional sports and the top international leagues. “I’ve been doing this for 30 years. We have been through many business cycles and valuations have been strong. I don’t see it any differently now.”

Most sports owners are also well capitalized enough to keep their team budgets separate from their outside businesses and other sources of wealth. While rising interest rates have cooled the housing market, it’s unlikely to impact Cleveland Cavaliers and Rocket Mortgage owner Dan Gilbert, who is the 23rd richest according to Forbes magazine with an estimated net worth of nearly $52 billion man of the world is.

(One exception: Losses in the Bernard-Madoff pyramid scheme depressed the Mets payroll, forcing owner Fred Wilpon to sell first part and then the rest of the team.)

“These guys have so much money that I think if they start getting pinched elsewhere it’s more or less a rounding error for their clubs,” said Tom Pitts, the European head of LionRock Capital, a private equity firm , which has a one-third stake in the Inter Milan soccer team. “Most of these guys didn’t dare to buy the club. It’s an expensive hobby.”

Rising interest rates could make it more expensive for potential owners to buy into the club if they have to borrow money to pay their new asking price. “It just costs a lot more money in absolute dollars to service the debt,” Pitts said.

A handful of high profile teams are currently on the market.

Washington Commanders owner Dan Snyder, who is under pressure to sell his team after an investigation uncovered a toxic corporate culture, says he would consider divesting all or part of the once-proud NFL franchise. It’s expected to rake in even more than the $4.65 billion that Walmart heir Rob Walton, who is the 16th richest person in the world with an estimated net worth of $61 billion, made this summer for paid for the Denver Broncos.

Robert Sarver launched his teams, the NBA’s Phoenix Suns and WNBA’s Phoenix Mercury, after an investigation found evidence of a racially and sexually insensitive workplace. Baseball’s Washington Nationals are up for sale, and the family that owns the Baltimore Orioles has also made a fuss about the sale. The NHL’s Ottawa Senators are also available for the right price.

Two of the biggest names in English football, Manchester United and Liverpool are also on the market. man u was valued at $4.6 billion by Forbes in September — just a bit higher than Liverpool; Both are expected to eclipse the $3.2 billion price paid for Chelsea this spring, which was briefly the highest ever paid by a sports team.

That record was less than two weeks old when the Broncos deal was announced.

“You have guys like the Waltons, and that’s a drop in the ocean,” Clarke said. “It’s a club. It’s like, “When’s the next Picasso for sale?” … The value sector has nothing to do with the economy. There is always a demand and always a tight supply.”

AP Sports Writer Jay Cohen contributed to this story. How much does it cost to buy a sports team?

Laura Coffey

World Time Todays is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Back to top button