Arctos Buys 17% Stake In Kings, Values Team At $1.8B

    • Arctos Sports Partners has reportedly entered an agreement to buy a 17% stake in the Sacramento Kings.
    • The investment will be the private equity fund’s second in an NBA franchise.

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Arctos Sports Partners has reportedly entered an agreement to buy a 17% stake in the Sacramento Kings, valuing the franchise at $1.8 billion. A person with knowledge of the transaction confirmed the deal to FOS, although it won’t be finalized until the NBA approves it.

Upon approval, the deal will see four of the Kings’ limited partners exit. One will be bought out by Ranadive, which purchased the Kings in 2013 at a $535 million valuation, and the other three will be bought out by Arctos, which will also receive three board seats as part of the deal.

The NBA loosened its ownership rules in January, allowing private equity investors to purchase stakes in a team with two rules:

  • A fund can buy as much as 20% of up to five franchises.
  • Each team can have no more than 30% owned by private equity funds.

Dyal Capital, which purchased under 5% of the Phoenix Suns in July, valuing the team at $1.55 billion, reportedly purchased a similar stake in the Kings during the same month.

The San Antonio Spurs were the first team to use up the 30% allotment when Sixth Street invested a reported $360 million alongside billionaire Michael Dell’s $180 million in June, valuing the team at $1.8 billion.

Arctos has invested in 13 professional teams over the last 20 months. In April, the firm purchased a 5% stake in the Golden State Warriors.