Wall Street giants Goldman Sachs and Rockefeller Capital Management say their family office clients are showing strong interest in investing in sports as leagues alter their ownership rules to embrace capital from institutional investors.
“The discussion around the broader sports ecosystem continues to be a very big area of focus for family offices, and these sessions have been very popular over the last few years,” Anushka Gupta, head of Goldman Sachs Apex in the Americas, said during a webinar Tuesday. “Sports is an asset class that has outperformed and in many ways is uncorrelated, and of course is an area of significant passion for many family offices we work with.”
Goldman launched a new sports franchise unit last year for its high-net-worth clients interested in team ownership, while J.P. Morgan set up a similar unit earlier this year as did Rockefeller Capital Management, a wealth management company with a family office services division. Former New York Yankees star and Miami Marlins owner Derek Jeter is on Rockefeller’s board of directors.
“Half of the [English] Premier League football teams are now owned by Americans. We have a lot of clients that want to take a look,” Rockefeller President and CEO Greg Fleming said at a New York media gathering in May. “There’s now a market around secondary sales, so there’s a lot of dialogue around that. The dialogue is a factor of 5-to-1 of what gets done, but we need to have the capability because so many clients want to look at it.”
ESPN has reported that private equity firms spent close to $86 billion on the sports industry in 2022, according to Preqin data. A new index from the sports private equity fund Arctos shows that sports team investments delivered an annualized return of 12% over the past two decades, compared with 10% for the S&P 500 and nearly 15% for private equity.
“Resoundingly, an area we see many family offices spending time is in women’s sports — things like the National Women’s Soccer League, WNBA [Women's National Basketball Association], the Women’s Tennis Association,” said Goldman Sachs' Gupta. “We’re doing early work understanding what the media right construct looks like, what the league dynamics support in terms of expansion — and that ranges from things like golf, sailing, rugby, surfing to NASCAR and UFC.”
The National Football League is the last major U.S. sports league to hold out from allowing institutional investment, but owners are in the process of establishing a framework to welcome private equity firms. In May, Atlanta Falcons owner Arthur Blank announced the addition of four limited partners to the team’s ownership group, including family office investor Rashaun Williams.
“There are complexities based on specific leagues on what’s approved in terms of where institutional players can play a more active role versus traditionally it being more individual and family-led,” Gupta said. “We’re continuing to see that evolve; we’re at the very early innings of that shift with a lot of scrutiny from various leagues.”