In recent years, sports assets have become increasingly attractive investment targets for global investors. Investment banks like Goldman Sachs are also setting their sights on sports investment banking, establishing dedicated teams to provide services around sports mergers and acquisitions, franchising, and financing. This shift comes as investment banks look to realign their businesses towards serving ultra high net worth individuals and providing wealth management services. The new sports investment banking teams will likely focus on deals such as stadium financing, franchise sales and valuation, and facilitating team acquisitions for billionaire clients.
Investment banks establish sports investment teams to tap into lucrative deals
Goldman Sachs is reportedly creating a new sports investment banking division to work with its asset and wealth management teams. The bank has appointed executives Greg Carey and Dave Dase to lead the new group. This comes after Goldman sold its $290 billion personal financial management business to Creative Planning, allowing it to focus more on ultra high net worth clients. Meanwhile, Goldman has also been involved in major sports deals in the past, providing financing for stadiums like the Yankee Stadium and advising on franchise sales. Other banks like Barclays and Citi have invested heavily in stadium naming rights. With more capital flooding into sports from private equity, sovereign wealth funds, and individual investors, banks see major opportunities to generate revenues from sports investment banking.
Surging valuations make sports assets attractive investment targets
The valuations of major sports teams and leagues have skyrocketed in recent years. According to PitchBook data, the average price return on NBA teams was 1057% between 2002 to 2021. Forbes’ list of most valuable sports empires showed a 23% increase in total value to $173 billion in 2022. High profile team acquisitions, like Todd Boehly’s $5.2 billion purchase of Chelsea F.C., have smashed records. The rise of sports betting and gaming has also fueled valuations. Leagues themselves are cashing in – the NFL signed $105 billion in media rights deals in 2021. With surging valuations, sports assets offer lucrative upside for investors and have become prized status symbols.
Investment banks connect billionaire clients to exclusive sports deals
Billionaire business leaders and celebrities are aggressively buying into sports assets. Amazon’s Jeff Bezos partnered with Jay-Z to buy the Washington Commanders NFL team for $5.6 billion. Hollywood star Natalie Portman launched the Angel City FC women’s soccer team. Gold man Sachs’ new sports investment banking division will likely focus on catering to these ultra high net worth individuals. The bank manages over $2.5 trillion for wealthy clients, who will be keen to leverage Goldman’s expertise and connections. Landing exclusive sports investment deals also serves as a status symbol and passion project for billionaires. By facilitating access, investment banks strengthen relationships with their most profitable clients.
With surging valuations and billionaires clamoring to buy teams, investment banks are embracing sports investment banking. By establishing dedicated teams and tapping into lucrative sports deals, banks like Goldman Sachs aim to generate revenues and cater to their ultra high net worth clients’ interests in owning sports franchises and assets.