Owning a professional sports team is not just a status symbol; it has evolved into one of the best-performing asset classes in the United States. With franchise values projected to compound at an estimated 15% a year, the total valuation across major leagues has surpassed an impressive $500 billion. As institutions and sovereign wealth funds increasingly view sports not merely as entertainment but as viable investments, the landscape of sports ownership is changing dramatically.
Chris Marangi, Chief Investment Officer of Gabelli Funds, recently discussed the lucrative world of sports assets. According to Marangi, historically, sports franchise ownership has been the domain of the ultra-wealthy. However, this perception is shifting as the financial viability of team ownership becomes more apparent. They are not merely vanity plays but, in fact, profitable investments that offer substantial returns.
One of the reasons for the appeal of sports franchises as an investment is their ability to generate recurring revenues with relatively low capital intensity. They wield significant pricing power, and the limited availability of teams adds to their allure. Major U.S. leagues—such as NFL, NBA, MLB, and NHL—have a finite number of teams, making each franchise a precious asset, much like Bitcoin. The trend is further supported by the emergence of innovative financial products like the Gabelli Opportunities in Live and Sports ETF (GOLS). This investment vehicle allows public market investors to access a diversified portfolio of sports-related assets, including teams, leagues, and various sports ecosystem partners.
Indeed, franchises often transact for astounding sums; recent sales have seen teams like the Los Angeles Lakers and the New York Giants trading for over $10 billion, while Formula 1 team ownership has reached approximately $6 billion. These staggering figures underscore the growing market potential for sports investments.
Marangi emphasized the diverse revenue streams available through sports franchises. With approximately three-quarters of Americans having watched a sporting event last year, and a corresponding 75% attending a game, the economic dynamics surrounding sports are incredibly robust. Ticket prices continue to rise, and the profits accrued from hospitality services—like food and beverage stands—also contribute to revenue. Even with concerns over traditional media’s financial commitments to sports, tech giants such as Netflix, Amazon, and Apple have aggressively entered the broadcasting arena, highlighting the importance of sports content.
When compared to other entertainment investments, GOLS distinguishes itself by focusing specifically on sports. While other entertainment-related ETFs may encompass a broader spectrum, this fund provides targeted access to this unique asset class on a global scale, including investments in non-U.S. soccer teams that are usually out of reach for retail investors.
As we look ahead to the economic environment in 2026, Marangi noted the essential factors to consider, including fiscal dynamics and interest rates. However, sports franchises tend to be resilient against economic fluctuations, serving as relatively stable assets in turbulent times. With constant changes in media viewership and consumption patterns, it remains crucial to keep an eye on these dynamics as they continue to influence the valuation of sports franchises.
In summary, the evolving perception of sports franchises from mere vanity assets to high-performing investment opportunities marks a significant shift in both finance and sports industries. As technologies like blockchain and AI gain traction, and sustainability investing becomes increasingly important, the intersection between sports, finance, and social impact will only deepen. For investors, the future looks promising as the sports industry’s focus shifts from pure entertainment to sustainable business models rooted in financial viability, making it an attractive avenue for long-term investment strategy.