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What Have Our Sports Lawyers Been Up To?
- Tune in to the R&G Dugout, the Ropes & Gray podcast series that delves into the dynamic world of sports investing, with a focus on the evolving ecosystem of media, entertainment, and private capital ventures.
- On January 17, Erica Han and Jackie Cohen spoke at the ICR Conference on a panel discussing "Hot Topics in Publicity Rights (aka "NIL") for Consumer Brands." Ropes & Gray was a sponsor of the three-day event in Orlando, Florida.
- On May 16, Lindsay Richardson spoke at the Sports Lawyers Association 50th Annual Conference on a panel discussing "The Globalization of Sports Finance – International Investment Opportunities and Challenges and How to Manage Them." Ropes & Gray was a sponsor of the three-day event in Nashville, Tennessee.
Private Equity Playbook: Comparing Investments in Professional and College Sports
By: Lili Flores, Maureen Greason
Edited By: Patrick Dorime, Tatum Wheeler, Kennedy
Myers
Private equity firms recognize the value of investing in U.S. professional sports—the sector's growth is outpacing other industries and asset classes due to the rapid increase in franchise valuations.1 However, those same firms have not yet fully taken the plunge into college athletics.2 The opportunities in this sector will continue to expand, and already sports funds like Elevate have reportedly closed deals with Power Four schools.3 Though the bottom line in professional and collegiate athletics investments may be the same, the sharpest private equity investors will apply distinct strategies for investing in each industry—particularly due to differences in applicable regulations and structures.4 The below explains the key differentiators between professional and collegiate sports that institutional investors need to know.
Current Field of Play in Professional and College Sports
Private equity is not new to the world of professional sports. It is a key player in everything from team ownership to stadium financing.5 Private equity firms play an important role in many sports-adjacent industries as well, investing heavily in sports-related media and technology.6 While private equity's role in professional sports has been evolving for years, private equity firms were not permitted to invest in U.S. professional sports franchises until 2019, and these investments have grown significantly since.7 The MLB was the first U.S. league to allow institutional investors to acquire ownership stakes, followed shortly by the NBA, NHL and MLS, and most recently, the NFL.8 NFL team owners voted in September 2024 to allow several private equity firms to acquire passive stakes of up to 10% of an NFL franchise.9 Some of the first private equity investments in the NFL have now come to fruition with Arctos Partners acquiring a 10% stake in the Buffalo Bills and Ares Management being approved to acquire a 10% stake in the Miami Dolphins, in addition to its investments in Hard Rock Stadium and the Formula 1 Miami Grand Prix.10 Now, all the U.S. major men's professional sports leagues allow private equity investments in franchises, and financial opportunities continue to grow.11 For instance, 10 of the 30 NBA teams are private equity-backed, and 10 other NBA teams are affiliated with private equity firms.12 These 20 teams are valued at an estimated $86.3 billion total.13 Recently, private equity investment firm Sixth Street purchased a portion of the NBA's Boston Celtics, contributing $1 million to the record-setting $6.1 billion purchase price, the highest sale price of any North American sports team.14
Private equity firms are also targeting other professional leagues and organizations, including NASCAR, Formula 1, and the National Women's Soccer League, as well as more niche professional leagues.15 For instance, Left Lane Capital led the initial funding round of $15 million for the Snow League, a professional winter sports league launched by snowboarder Shaun White.16 Further, private equity firms have become increasingly interested in emerging leagues, such as the professional padel league World Padel Tour, and the professional pickleball leagues Major League Pickleball and the Professional Pickleball Association, which have merged to further propel the growth of the sport.17
Due to the significant changes to the business of college athletics over the past five years and continuing shifts in the industry, private equity firms are now starting to consider college sports investments. Name, Image, and Likeness (NIL) deals have bypassed the amateurism model of the past, and top conferences see large profits and media contracts.18 Yet, at the same time, college and university operating costs have increased,19 the opening of the transfer portal is driving competition among schools, and Division 1 schools that opt in to the House v. NCAA settlement (the "House settlement") have the additional burden of annual revenue sharing.20 As the revenue gap between schools in different athletic conferences continues to widen, and less profitable schools are left without viable conference exit options, schools could be left with little choice but to turn to outside investors.21 Simultaneously, schools that are already athletically and financially successful may seek to further commercialize their sports programs, adding additional resources to remain competitive and increase the quality of their programs.22
While the framework for investing in college athletics has not yet been solidified in the same manner as in professional sports, investors have begun to consider a variety of potential investment opportunities. Private equity investors see college sports media rights, sponsorships, merchandise, and ticket sales as "underleveraged assets" with strong revenue potential.23 Further, investors are signaling interest in investing directly in university athletic departments, with a focus on football, which many investors see as undervalued.24
As an example of a school seeking private capital, Florida State University (FSU) has been working for years to close the revenue gap between itself and higher-earning rivals, and has turned toward private equity.25 The school reported an athletic department debt of $2.5 million in FY 2023, and cited an approximate $7 million revenue gap between the school and peers in the Big Ten Conference and Southeastern Conference (SEC) in 2024, projected to increase to $30 million in 2025, with conference realignment and new media deals.26 FSU's private equity discussions began in part due to its reported desire to exit the Atlantic Coast Conference (ACC) because of this inter-conference revenue gap.
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Footnotes
1 Brian Anderson, Private Equity Is Set to Revolutionize College Athletics, SportsBus. J. (Feb. 24, 2025), https://www.sportsbusinessjournal.com/Articles/2025/02/24/privateequity-is-set-to-revolutionize-college-athletics/.
2 Michael Ozanian, Private Equity Looks to Buy In to College Sports, CNBC Sports (Dec. 19, 2024), https://www.cnbc.com/2024/12/19/private-equity-looks-to-buy-in-tocollege-sports.html.
3 Jessica Golden, Sports Agency Elevate Launches $500 Million College Investment as Payment Landscape Evolves, CNBC (June 9, 2025), https://www.cnbc.com/2025/06/09/ elevate-launches-500-million-college-sports-investment.html.
4 Id.
5 Brendan Coffey, Sports Grow From Private Equity Afterthought to Booming Market, Sportico (May 16, 2024), https://www.sportico.com/business/finance/2024/when-didprivate-equity-start-investing-in-sports-teams-1234779117/.
6 Id.
7 Brendan Coffey, MLB Private Equity Ownership Rules: Can PE Have Stakes in Teams, Sportico (July 3, 2025), https://www.sportico.com/feature/mlb-ownership-rulesprivate-equity-1234784526/; Brendan Coffey, Sports Grow From Private Equity Afterthought to Booming Market, Sportico (May 16, 2024), https://www.sportico. com/business/finance/2024/when-did-private-equity-start-investing-in-sportsteams-1234779117/.
8 Brendan Coffey, Sports Grow From Private Equity Afterthought to Booming Market, Sportico (May 16, 2024), https://www.sportico.com/business/finance/2024/whendid-private-equity-start-investing-in-sports-teams-1234779117/; Lillian Rizzo, Private Equity Will Be Able to Invest in the NFL But Won't Have Much Say in Team Decisions, CNBC Sports, (Sept. 5, 2024), https://www.cnbc.com/2024/09/05/nfl-private-equityhow-investing-in-teams-will-work.html.
9 Rizzo, supra note 8. The vote permitted approved funds including Arctos Partners, Ares Management Sixth Street and consortium groups consisting of Blackstone, Carlyle, and CVC Capital Partners to acquire passive stakes in NFL franchises (Josh Sim, NFL Owners Vote to Allow Private Equity Investment in Franchises, SportsPro (Aug. 28, 2024), https://www.sportspro.com/news/nfl-private-equity-institutional-investmentowners-vote/).
10 Eric Jackson, NFL's First Private Equity Deals Approved for Bills, Dolphins, Sportico (Dec. 11, 2024), https://www.sportico.com/business/team-sales/2024/nfl-privateequity-deals-approved-bills-dolphins-1234819983/.
11 Coffey, supra note 5.
12 Jordan Rubio and James Thorne, Major League Investors: Private Equity's Pro Sports Ties, PitchBook (Feb. 25, 2025), https://pitchbook.com/news/articles/private-equitysports-investment-dashboard.
13 Id.
14 Mike Vorkunov, Jay King, and Jared Weiss, Celtics Sold for $6.1 Billion, Highest Price in North American Sports History, N.Y. Times (April 21, 2025), https://www.nytimes.com/ athletic/6218327/2025/03/20/celtics-franchise-sale-william-chisholm-highest-valuebillion/.
15 Chris Smith, Private Equity Investment in Sports: A League-by-League Breakdown, SportsBus. J. (Nov. 4, 2024), https://www.sportsbusinessjournal.com/ Articles/2024/11/04/finance-private-equity-leagues/; Coffey, supra note 5; Jessica Golden, Leslie Picker, Ritika Shah, Women's Soccer Draws Private-Equity Interest as Team Valuations Soar, CNBC (July 4, 2024), https://www.cnbc.com/2024/07/04/ nwsl-private-equity-interest.html; Business Wire, The Snow League Secures $15 Million in Funding to Revolutionize World's First Professional Winter Sports League Dedicated to Snowboarding and Freeskiing, Yahoo!Finance (Jan. 14, 2025), https://finance.yahoo. com/news/snow-league-secures-15-million-150000727.html.
16 Business Wire, supra note 15.
17 Andrea Gaini, From Padel to Volleyball, PE Targets Increasingly Niche Sports, PitchBook (Nov. 4, 2024), https://pitchbook.com/news/articles/from-padel-to-volleyball-petargets-increasingly-niche-sports; Jessica Golden, Major League Pickleball and PPA Tour Complete Long-Awaited Merger, CNBC (Mar 1, 2024), https://www.cnbc. com/2024/02/29/major-league-pickleball-and-ppa-tour-complete-merger.html.
18 Brian Anderson, supra note 1; Michael Keenan, Out of Bounds: College Sports Is Becoming More Like the Pros, PWC (Feb. 3, 2025), https://www.pwc.com/us/en/ industries/tmt/library/out-of-bounds-college-sports.html.
19 Mike Berardino, Private Equity to the Rescue for College Sports? Not at Notre Dame, AD Pete Bevacqua says, IndyStar (Dec. 18, 2024), https://www.indystar.com/story/sports/ college/football/2024/12/18/notre-dame-athletic-director-pete-bevacqua-rejects-privateequity-house-settlement-college-football/77059965007/.
20 Ozanian, supra note 2; Eben Novy-Williams, FSU Expands Legends Deal as Sixth Street Talks Continue, Sportico (July 10, 2024), https://www.sportico.com/business/ finance/2024/fsu-legends-sixth-street-talks-1234787224/; Shlomo Sprung, Private Equity in College Sports is Inevitable and Complicated, Boardroom (Feb. 20, 2025), https://boardroom.tv/private-equity-college-sports/.
21 Ozanian, supra note 2; Daniel Libit and Eben Novy-Williams, FSU Athletic Association Lags in Cash and Clout, Sportico (June 6, 2024), https://www.sportico.com/leagues/ college-sports/2024/florida-state-university-athletic-association-1234783071/; Andrea Adelson, Florida State Suing ACC Over Grant of Rights, Withdrawal Fee, ESPN (Dec. 22, 2023), https://www.espn.com/college-football/story/_/id/39167937/florida-state-sueacc-grant-rights-withdrawal-fee.
22 Keenan, supra note 18.
23 Id.
24 Id.; Billy Witz, As the College Sports Model Teeters, Champion Michigan Works to Balance, N.Y. Times (Jan. 10, 2024), https://www.nytimes.com/2024/01/08/us/nationalchampionship-football-michigan-washington.html.
25 Novy-Williams, supra note 20 (in FY 2022, FSU reported a total revenue of $2.9 million, while Florida reported a $189.8 million revenue.).
26 Eben Novy-Williams and Daniel Libit, FSU's 'Project Osceola' Private Equity Push Began in 2022: Docs, Sportico (Jan. 30, 2024), https://www.sportico.com/leagues/collegesports/2024/fsu-project-osceola-private-equity-jp-morgan-1234764861/.
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