The Broncos Sale Highlights an Emerging Investment Trend

The Denver Broncos were already a hot commodity, but an additional factor may have helped push forward their record-setting $4.65 billion sale to a group led by Walmart heir Rob Walton: Sports franchises are seen more and more as recession-proof properties.

Amid market uncertainty, particularly in tech stocks and cryptocurrencies, sports teams have emerged as assets that show consistent growth, insulated from market conditions. 

On top of that, the number of potential buyers is rising: By Forbes’ count, there are now 2,668 billionaires – a 31% increase from 2017. Their average net worth has grown 26.9% in that time to $4.8 billion.

Team values are rising annually across leagues. 

• NFL teams grew 14% year-over-year to $3.5 billion last year, per Forbes.
• NBA team values increased 4% last year to reach an average of $2.2 billion.
• MLB teams rose 9% to $2.1 billion on average.
• The average NHL team grew 32% to $865 million in value. 

No Brakes on Stakes

While Chelsea FC set a global record with its $5.2 billion sale price (which includes promised investments in the team and its venue), the Broncos’ $4.65 billion price tag is the largest ever for a North American team. There is an equally robust market for non-controlling team stakes.

Last year, private equity firms spent $51 billion on sports transactions, including $3 billion in minority stakes in North American teams.

Philadelphia 76ers and New Jersey Devils owner Harris Blitzer Sports and Entertainment struck a deal this month to sell a more-than-5% stake to private equity firm Arctos Sports Partners at a $3 billion valuation.