• College sports breakthrough underscores size of addressable market
• Scarcity value, strong demand, consistent returns are key drivers
• Retail investor participation, public market benchmarks could come next

In December, the University of Utah approved a deal that could transform the college sports landscape.

Working in partnership with New York-based sports investor Otro Capital, the university will spin off a not-for-profit entity from its athletic department with a view to consolidating revenue streams from sponsorship, ticketing, merchandising and licensing.

Otro, which will take a minority stake, will support these monetization efforts. In a letter to the University of Utah community last month, President Taylor Randall and Athletics Director Mark Harlan said the new model would “enhance operations of key commercial activities and generate a significant influx of funding.” 

The landmark deal, reportedly worth up to USD 500m, will be watched closely as a potential blueprint for how private equity investment in college sports might be structured.

“I think it will open the floodgates though whether that happens in the next 12 months or over three to four years remains unclear,” said Paul Harris, who leads KPMG’s media and sports deal advisory practice. “Once we have a few case studies, it becomes much easier for investment committees to approve deals because there’s a playbook and precedent.”

Other deals are reportedly in the works, including a potential tie-up between the Big 12 Conference and private equity investors RedBird Capital and Weatherford Capital.

As college sports enters its “professional era” it is inevitable that capital will follow, noted Bobby Sharma, founder and managing partner of Bluestone Equity Partners, a New York-based private equity firm specializing in sports, media and entertainment. It’s just a matter of putting frameworks in place around areas such as athlete compensation and revenue-sharing.

“The demand drivers are obvious: massive audiences, powerful brands, and commercial rights that have been under-optimized relative to professional leagues for generations,” he said.

Scarcity value

These are the same drivers shaping increasing investor demand across the broader sporting franchise ecosystem. In the US, private equity has been targeting major sports franchises since 2019, when Major League Baseball (MLB) opened up to institutional capital.

The National Basketball Association (NBA) followed suit in 2021, while in 2024 the National Football League (NFL) cracked the door, allowing the likes of Arctos Partners, Ares Management and Sixth Street to acquire minority stakes in franchises.

Since then, a wave of capital has swept into sports, with media rights at the heart of the investment thesis.

“Investors aren’t approaching these deals with traditional LBO or DCF [discounted cash flow] models. Instead, they’re betting on monetizing content,” said Matthew Abbott, global co-chair of M&A at Paul Weiss and a co-lead of its newly formed sports practice.

In the age of cord-cutting, live sports remain one of the few media properties with resilient demand, thanks to unparalleled customer loyalty. “Sports is the premier media asset globally,” said Mark Wade, a partner at Houston-based CAZ Investment, which counts professional sports among its core strategies.

Recent media rights deals underscore this resilience. In November, Paramount was reported to have secured UEFA Champions League rights in the UK and Germany after an auction that raised over EUR 10bn (USD 11.7bn) in total, while the NFL struck an 11-year around USD 110bn agreement with broadcast partners in 2021. Commissioner Roger Goodell has even hinted the league could revisit negotiations as soon as this year.

The NFL may be the bellwether, but the trend spans the entire industry. KPMG’s Harris cites Formula One as another example. “They’ve done an outstanding job expanding their reach globally and attracting new fans, particularly in the US, where interest was minimal just a few years ago,” he said.

College football promises significant upside, especially with the recent restructuring of the conference and playoff systems, which means more top teams play each other more regularly. “That will drive fan interest and, by extension, increase the value of media rights – which is exactly what the conferences and the NCAA want,” said Harris.

Against this backdrop, valuations are soaring. Jon Oram, head of Davis Polk’s sports practice, notes that sports franchises have seen roughly 10%-15% CAGR over the past 25 years.

Scarcity is another value driver. There aren’t many top franchise assets, especially in the US, where leagues have fewer teams than in Europe and no relegation system. That means more capital chasing fewer opportunities. “There’s not an unlimited supply,” said Wade. “There are only 32 NFL franchises.”

Money makers

At the same time, revenue-sharing schemes – where media rights proceeds are distributed equally – and collective bargaining agreements, which cap player salaries, make it hard to lose money as an owner in a major US league.

Over the last few decades, most franchises have switched from cash-flow negative to generating positive returns. The combination of clear monetization opportunities, scarcity, and consistent cash flow has helped transform sports from a passion-driven niche into a durable institutional asset class.

“The underlying fundamentals – scarcity, global demand, demographic resilience, and content that outperforms every other category in live media – create a level of defensibility that few sectors can match,” said Bluestone’s Sharma.

To some, the evolution is comparable to that of real estate. Buildings were once owned by single investors supported by mortgages. Then developers, new financing structures and institutional capital arrived. Sports is now at a similar inflection point.

“Twenty-five years ago sports teams were locally-owned family businesses; 15 years ago, we started seeing syndicates of wealthy individuals and more complex financing structures,” said Davis Polk’s Oram. “Today, we’re getting to where real estate was in the 1990s, with dedicated sports funds and multiple layers of financing.”

Apollo Global Management launched Apollo Sports Capital in September 2025 and quickly bought a 55% stake in Spain’s Atlético de Madrid – at a reported valuation of EUR 2.5bn – and a minority interest in Ryan Reynolds and Rob McElhenney’s Wrexham AFC. CVC also recently unveiled a dedicated sports division to house existing investments spanning European soccer, Six Nations rugby and global volleyball.

Elsewhere, Endeavour CEO Ari Emanuel last year raised over USD 2bn from investors including Apollo, RedBird, Ares and Qatar Investment Authority to launch MARI, a holding company with assets ranging from the Miami Open and Madrid Open to Frieze art fairs and Barrett-Jackson auctions. Ares, meanwhile, is currently in the market with its second dedicated fund.

New frontiers

The broadening of the investor landscape mirrors an expansion in the opportunity set – as the college sports breakthrough ably demonstrates. Investors are opening new frontiers with previously untouched sports and taking established segments across new geographical frontiers.

Women’s sports have moved from “emerging” to legitimate early-stage investments, driven by audience growth, favorable unit economics, and cultural momentum, according to Sharma. Sixth Street’s investment in National Women’s Soccer League (NWSL) team Bay FC is one example.

“Women’s sports are seen as an under-monetized growth segment, with strong expectations for double-digit revenue growth,” added Josh Smigel, PwC’s US private equity leader.

In terms of internationalization, the NBA’s planned expansion into Europe will be closely watched this year. The format calls for 12 permanent teams in cities such as London, Paris and Madrid, with recent reports suggesting each franchise could be sold for as much as USD 1bn.

Other investors are focusing on emerging markets. They include General Atlantic, which recently acquired a 49% equity stake in Mexico’s most popular soccer club, Club América, alongside the iconic Estadio Azteca – now known as Estadio Banorte – and the land parcels adjacent to the stadium.

It follows the 2021 purchase of a 50% stake in Club de Fútbol Necaxa, another Mexican soccer club. The buyer, NX Football USA, is an investment group backed by the likes of Reynolds, fellow actor Eva Longoria, and former German international Mesut Özil.

In other sports, Global Sports Capital Partners (GSCP), a newly launched private equity firm, announced in November it would invest in Mexico’s Liga de Fútbol Americano (LFA).

As previously reported by Mergermarket, GSCP’s founder Michael MacDougall sees significant growth potential for professional American football in Mexico. The country is already the NFL’s largest international market and the sport has been played there at university level for more than 80 years.

“In places where passion for a sport significantly outpaces the commercial sophistication of the league infrastructure, there’s an opportunity to unlock substantial value by bringing professional management, marketing capabilities and fan engagement strategies that are standard in mature markets but transformative in developing ones,” MacDougall said.

Beyond teams and leagues, investors are targeting the ecosystem around sports, including technology-enabled services, media infrastructure, and data platforms. Bluestone, for instance, has acquired Players Health, a compliance-focused sports tech firm, and Scorability, a recruiting platform for college football.

“Team ownership and media rights remain powerful, but the more direct alpha is in the ecosystem,” said Bluestone’s Sharma.

The road to retail

Meanwhile, with the onset of institutionalization, one of the sector’s lingering challenges is starting to be addressed: a lack of liquidity in certain segments. Developments include the emergence of a secondary market.

“Historically, if you bought a 5% stake in a hockey team, you were locked in until the owner sold,” said Oram of Davis Polk. “Now, with funds willing to buy secondary interests, there are ways to cash out.”

Arctos, the Dallas-based, sports-dedicated investor established in 2019, was an early mover in acquiring NFL interests, picking up a 10% stake in the Buffalo Bills and 8% of the Los Angeles Chargers. It has also pioneered secondaries-like investing strategies in the sports market.

In an interview with Crain Currency in September 2024, the firm’s co-founder, Ian Charles, estimated the total addressable market (TAM) for major North American and global sports leagues to be around USD 550bn. Within this space, around 2,000 non-family minority investors lack a “functional liquidity solution.”

Looking ahead, advisors point to the arrival of GP-led secondaries, among other solutions. “Most leagues require a five-year minimum hold, but we are increasingly seeing evergreen funds that can provide permanent capital and continuation funds that allow fund managers to avoid forced exits,” Oram observed.

As sports investing evolves, there appears to be a role for private wealth and retail capital as well. Ares, which owns stakes in sports assets such as the Miami Dolphins and Inter Miami, earlier this year launched an evergreen vehicle for its sports, media and entertainment strategy.

There is certainly interest on the demand side, with registered investment advisors (RIAs) seeking access to sports funds for their clients.

In December, CAIS Advisors announced a new fund that will offer exposure to franchises in all five major North American professional sports leagues (NFL, NBA, MLB, NHL, and MLS) via Arctos and Todd Boehly’s Eldridge Industries. Commitments from individual investors start at USD 25,000.

CAZ Investments has established a partnership with iCapital to give financial advisors and their clients access to its sports strategies. A significant LP in Arctos’ funds, the Houston-based firm primarily focuses on the major US sports leagues but also holds an interest in the Premier Lacrosse League, among other assets.

Liquidity and broader investor participation are two pieces of the puzzle if sports is to become a mature asset class. A third, according to KPMG’s Harris, is public market benchmarks along the lines of real estate investment trusts (REITs). Outside of the Atlanta Braves and Formula One, via Liberty Media, the public markets universe for sports is relatively sparse.

“There will need to be a more defined public market presence,” Harris said. “That’s likely a medium- to long-term development, but it feels inevitable.”