American billionaires have flocked into the NBA in the last decade.
When you take a step back, it makes perfect sense. Chunky profits are virtually guaranteed every season, thanks to a system of salary caps, collective bargaining and revenue sharing across the NBA.
On top of that, team values just keep trending up and to the right. The long-mooted NBA expansion franchise in Las Vegas is likely to cost the winning bidder between $7bn and $10bn. Whoever is the public face of the takeover, it will almost certainly include private equity wealth too.
And therein lies an interesting point. Private equity is one area that has seen enormous investment from limited partners in recent years, just like sports.
Why? Well, some experts theorise that it is simply a reaction to so many billionaires being minted in the US post-pandemic. Essentially, they need somewhere to park their wealth.
What’s more, the view is that sports are a very resilient asset class. They are largely immune to supply chain shocks and geopolitical fissures; they are part of the booming experience economy; and with franchise-based systems like the NBA, you get to pick and cooperate with your competitors.
It’s no surprise, therefore, that Bill Foley, one of sport’s most prolific investors has thrown his hat in the ring to acquire a controlling stake in the Vegas NBA franchise.
Foley already owns the Las Vegas Golden Knights of the NHL, meaning he knows better than most the once-doubted appetite for sport in Sin City.
Other properties in his Black Knight Sports & Entertainment holding company include the indoor football team Vegas Knight Hawks and Premier League soccer club AFC Bournemouth.
And he appears particularly busy at present trying to cast his net wider into sports.
Only today, he completed a deal worth approximately $60m to buy Premiership Rugby club Exeter Chiefs.
Granted, it’s a deal of a completely different magnitude to the would-be Vegas NBA franchise. But given that it ends 155 years of the Chiefs, who are located in the southeast of England, being owned by its members, it does reiterate how all-in Foley is on sports.
Receive exclusive football transfer news and updates twice a week to your mailbox
