Why Private Equity is Betting Big on Sports Franchises and Media Rights
The convergence of media, technology and global fandom has fundamentally reshaped the financial underpinnings of professional sports. Once viewed largely as passion-fuelled business ventures or the playthings of wealthy individuals, sports franchises are now increasingly being treated as institutional-grade assets.
Private equity firms, sovereign wealth funds, family offices and pension funds are committing billions to sports teams, leagues and media rights in a bet that the sector is poised to deliver stable, long-term returns. As sport continues to globalise and digitise, the case for sports as a distinct asset class is attracting the most sophisticated investors, with growing interest even in markets traditionally outside the global spotlight—such as Australia.
Sports franchises offer a unique investment profile. They combine scarcity value with strong brand loyalty, often possess monopolistic or oligopolistic dynamics within their respective leagues and benefit from long-term contracts for sponsorship, broadcasting, merchandising and licensing. These revenue streams are increasingly predictable and often indexed to inflation or GDP growth. At the same time, the rise of direct-to-consumer media platforms and growing interest in traditionally non-core sports such as women’s leagues, esports and second-tier competitions has widened the scope of potential returns beyond the field of play.
Private equity’s growing appetite for sports has been particularly evident in the United States, where the value of major league teams has skyrocketed. In the past five years alone, PE firms have established dedicated funds to acquire minority and majority stakes in teams across the NBA, MLB, NHL, and MLS. For example, Arctos has stakes in a number of sports franchises, while RedBird Capital acquired AC Milan, having previously acquired French club Toulouse and a significant interest in Fenway Sports Group, owners of Liverpool FC and the Boston Red Sox. These firms are not driven by trophy ownership but by a well-reasoned thesis: that sports can deliver uncorrelated, long-term returns driven by IP monetisation, media rights inflation, and cross-border growth.
The economic engine behind the sports-as-investment thesis is media rights. As traditional broadcasters and streaming platforms scramble for exclusive, must-watch content in a saturated attention economy, live sports remains one of the few forms of programming that delivers large, real-time audiences. This makes sports leagues indispensable to advertisers, cable networks and tech giants alike. In the US, the NFL’s recent media rights deal with broadcasters and Amazon totals more than US$100 billion over 11 years. In Europe, the English Premier League continues to command escalating broadcast fees, while in India, the sale of IPL cricket rights for over US$6 billion shocked many observers who once viewed cricket as an under-monetised market.
This monetisation trend has not bypassed Australia. The Australian Football League (AFL) recently signed a record seven-year broadcast deal with Seven West Media and Foxtel, underlining how local sporting institutions are capitalising on rising demand for sports content. Meanwhile, the National Rugby League (NRL) has also seen a surge in media rights. These sports are now attracting the attention of global investors who view Australian sport as an untapped growth market, particularly given its high per-capita sports engagement and established fan base.
In a notable move, Silver Lake Partners, a global private equity firm, took a stake in New Zealand Rugby’s commercial rights arm, valuing it at NZ$3.5 billion. The landmark deal gave Silver Lake a pathway into one of rugby’s most iconic brands, the All Blacks and marked a turning point for Southern Hemisphere sports governance. These deals not only provide capital to sporting bodies and franchises, but also bring strategic discipline, digital expertise and commercial networks to help scale revenue and expand global reach.
The institutionalisation of sports ownership has also altered governance models. In the past, league rules often prohibited institutional investors from owning teams due to concerns over integrity, competitiveness and long-term commitment. But as valuations climbed and the capital demands of teams grew, leagues began loosening restrictions. The NBA, for example, changed its ownership rules to allow private equity funds to own up to 30 percent of a team and similar relaxations are being considered in other major leagues. Australia has not yet formally embraced this model at a regulatory level, but there is growing pressure to modernise ownership structures to unlock new capital and professionalise operations. Clubs in the A-League, for instance, have already attracted foreign investment, with City Football Group acquiring Melbourne City FC as part of its global soccer portfolio.
One of the compelling reasons private equity is drawn to sports is the potential for operational improvement. Many franchises still operate with legacy business practices and underdeveloped commercial functions. By bringing in expertise in marketing, data analytics and fan engagement, investors can boost profitability without needing to materially increase ticket prices or win-loss ratios. Moreover, new revenue channels such as digital collectibles (NFTs), sports betting, streaming subscriptions and extensive merchandising are enabling owners to monetise fandom in entirely new ways. A sports team today is not just a matchday business—it is a multi-platform content and engagement company.
There are, of course, risks. Valuations of sports franchises have risen steeply and there are questions about whether the current trajectory is sustainable. Much of the valuation growth has been based on aggressive assumptions about media rights inflation and the ability to globalise fan bases. A softening in consumer discretionary spending, competition from new forms of entertainment, or regulatory interventions—such as gambling restrictions—could dent future returns. Furthermore, sports is inherently emotional and balancing profit motives with community expectations remains a challenge.
Private equity investors must also navigate league governance structures, which often include voting rights for other teams and requirements around capital calls, stadium investments, salary and budget caps or grassroots funding. These factors make the sports asset class less liquid and more complex than traditional investments. However, many investors are willing to accept these constraints in exchange for long-duration assets with monopoly characteristics, inflation protection and brand loyalty that is almost impossible to replicate.
The next frontier lies in women’s sports, where audience growth, sponsor interest and valuation potential are increasing. In Australia, the popularity of the Matildas following the 2023 FIFA Women’s World Cup demonstrated the commercial potential of women’s football. Investors are beginning to explore structured funds and acquisition vehicles dedicated to women’s leagues, where lower entry costs and faster audience growth make the investment case more compelling than was previously the case.
As private capital deepens its engagement with global sport, a new asset class is emerging—one that sits at the intersection of culture, media and finance. Sports franchises and their associated rights are no longer simply high-profile indulgences or unpredictable cash burners. In the hands of institutional investors with long-term time horizons and operational expertise, they are becoming yield-bearing, brand-powered assets with tangible upside. Whether through direct ownership, media rights packaging, or adjacent plays in sports betting and fan engagement technology, private equity’s move into sports reflects a broader shift in how value is created and captured in the modern economy.
Australia, with its rich sporting culture, modern infrastructure and growing commercial potential, is well positioned to be a part of this transformation. If regulatory frameworks and league governance evolve to accommodate institutional capital, the next decade could see Australian sports franchises become not just national icons but global investment-grade assets.
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