Billionaire families opt to buy sports teams over art, cars

A version of this article originally appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to high-net-worth investors and consumers. become a member to receive future editions straight to your inbox.

For the ultra-rich, sports teams have transformed from status symbols to mainstream investment assets, according to a new study by JP Morgan Private Bank.

The bank’s 23 Wall division, which serves the 0.01 percent, surveyed 111 billionaire principals of private family investment firms with combined wealth of more than $500 billion between March and August. Twenty percent of family office principals reported having a controlling interest in sports teams; this rate was 6% in 2022.

The bank noted that sports assets have outpaced traditional trophy assets such as art and cars, with 34% of managers investing in teams and arenas, compared to 23% in art and 10% in cars.

Andrew Cohen, executive chairman of JP Morgan’s global private bank, told Inside Wealth he expects this trend to continue. He said sports team valuations continue to rise, delivering strong returns, supported by media rights deals and sponsorships. The bank estimates the total value of sports mergers and acquisitions values ​​franchises in the U.S. and Europe at a combined $400 billion, with investment increasing eightfold in the past five years.

Cohen added that sports team ownership taps into entrepreneurial drive in a way other hobbies can’t. Many principals sit on the board or are active in franchise operations, he said.

“Unlike art or cars, sports ownership offers principals a platform for active participation,” he said. “This hands-on approach aligns with the broader trend of families aiming to become ‘active architects’ rather than passive investors.”

While the growth of the sports industry is drawing investors beyond passionate fans, Cohen said many principals report their motivations go beyond financial returns. He noted that the desire to bring a family together is an important driver for sports team owners. Female team owners were also likely saying they supported women’s sports to “help level the playing field,” according to the report.

As valuations continue to rise, even ultra-high-net-worth individuals are being priced out in bidding wars for control of shares, he said. However, according to Cohen, there are ways for investors to get a piece of the action at lower price points, such as joining an ownership group or syndicate to buy minority shares, investing in arenas, and making “sports-adjacent” investments in data analytics or merchandising.

Heavy-duty family offices often use more than one method when investing in sports. For example, Blackstone’s David Blitzer, the first person to own a stake in all five major U.S. men’s sports leagues, has backed at least six sports companies this year, including a padel club chain and a betting app, through his family office Bolt Ventures.