CNN
—
The Los Angeles Lakers may not have as many NBA titles as the Boston Celtics, but the Lakers topped their archrival with a record-setting $10 billion franchise price tag this week — just three months after the Celtics held the honor for the highest sale price for a professional sports team at $6 billion.
But this record might not last very long. The NFL’s New York Giants are in the process of shopping a 10% ownership stake, which could put the team’s overall value above $10 billion, according to Marc Ganis, a Chicago-based sports consultant who advises NFL, NBA and MLB clubs.
What’s clear is that the valuations of sports teams are continuing to climb — and climb rapidly.
Victor Matheson, a professor of economics at College of the Holy Cross who specializes in sports business, said in his 30 years of studying sports sales, he can’t remember a team selling for less than it was purchased. For example, a 10% stake in the Milwaukee Bucks was sold in September 2024, which valued the small-market NBA team at $4 billion, a windfall from when the team was sold a decade earlier for $550 million.
So even if the $10 billion record for the Lakers stands a while longer, other teams will eventually be sold at a hefty premium to their previous purchase price.
The impact on fans, meanwhile, can be complicated. Fans often publicly yearn for an owner who is willing to spend what it takes to make the team competitive, yet some of the wealthiest owners have lousy records. In the end, fans are more likely to care about a team’s winning percentage than its owner’s net worth.
Sports franchises have long been considered trophy assets, like luxury properties in short supply.
“The only thing I remember from all those economics courses is when the supply is fixed, and the demand goes up, prices go up. It’s as simple as that,” said Sal Galatioto, one of the leading sports investment bankers brokering team sales. “It is so rare you get a chance to buy control of a premier franchise.”
Sports franchises have grown in value over the last decade. Cord-cutting, streaming and DVRs have made it more difficult for advertisers to reach viewers, meaning live sports programming has become more important.
Major sporting events have reliably been among the most-watched events on television.
“Sports content is the lifeblood of the media industry and that drives tremendous value for these franchises,” said Lori Bistis, a deals partner and one of the leaders of accounting and consulting firm PricewaterhouseCoopers’ sports practice.
While cord-cutting has resulted in some regional sports networks falling on to financial hard times in recent years, streaming services have shown increasing interest in broadcasting games.
Bistis said it only makes sense to see sports franchise values rise in tandem with that of lucrative television rights deals.
“We’re not surprised to see the increase in valuation and all the data points to it continuing,” she said.
Another factor: Buyers of professional sports teams know they will have access to valuable data on the demographics and spending behavior of their fans. Bistis said data can be monetized through different viewing experiences, merchandise and events.
Galatioto said the increase in sports gaming since it became legal in 2018 is also driving up the interest in sports and sports programming.
Deep-pocket investors have lined up to buy even minority stakes in teams and that is helping to drive up the valuations, as well.
“There’s a lot of new money coming into the business,” said Galatioto. “I can always find the high net-worth individuals willing to pay more. An individual gets ego gratification value, gets perks, they get other advantages.”
A potential buyer could think, “I’m willing to pay a premium to be an owner of my favorite team. I’m not willing to pay a premium to be an owner of a bunch of assets,” according to Galatioto.
And a greater supply of potential buyers interested in minority stakes in teams can help drive up the prices being paid even more, said sports consultant Ganis.
“The universe of potential buyers of a 5% or 10% stake is much larger than the universe of potential buyers who can buy a 100% stake,” he said.
Billionaire businessman Mark Walter, who is now buying a controlling stake in the Lakers with this deal, had been one of those minority owners with a significant stake in a team, Ganis noted.
Walter had a nearly 27% stake, so his purchase of about a quarter of the team is all he needed to cross the 50% threshold. He didn’t have to put up a full $10 billion in his bid for the Lakers — just a fraction of that amount, according to Ganis.
Walter, the CEO of global investment and advisory firm Guggenheim Partners, also leads Guggenheim Baseball Management, which owns a controlling stake in the defending champion Los Angeles Dodgers.
Guggenheim Baseball Management has invested heavily in the Dodgers’ success. The Dodgers, who have the highest team payroll ($338 million) in baseball, are followed by the New York Mets, at $325 million, according to salary tracker Spotrac. The Mets, who were bought by Wall Street financier Steve Cohen in 2020 and had the highest payroll in 2024, fell to the Dodgers in last year’s postseason.
But spending big on players, coaches and a front office doesn’t necessarily lead to winning titles.
Only twice in the last 15 years has the baseball team with the top payroll won the World Series: the Boston Red Sox in 2018 and the Dodgers in 2020. (Major League Baseball is the only American sports league without a salary cap.)
There have been champions during that time, such as the Kansas City Royals, whose team payroll in 2015 was just a fraction of the league’s top payrolls.
The deep pockets of the new class of owners have less of an influence on a team’s success in leagues with salary caps, such as the National Football League and National Hockey League.
So while baseball fans may get frustrated when their owners are not willing to spend to improve the team’s roster, having an ownership of more modest means doesn’t necessarily prevent a team from coming out on top.
Matheson said he’s studied the relationship between winning and payroll in baseball and found that higher payrolls do help teams win, at least during the regular season, but payrolls are only responsible for predicting about 30% of a team’s success. The other 70% is due to factors like good management, avoiding injuries and even luck.
“If you’re a fan, you’re always wanted an owner who spends more money, but just because you have got an owner who does spend more money, that doesn’t mean you’re winning the whole thing,” he said.
