Why Sports Franchises Are ‘Recession-Proof’

Bruin Capital launched in 2015, before the current gold rush, because founder George Pyne knew what has become obvious to other investors today: Sports is a resilient, appreciating asset class.

“It’s been pretty recession-proof,” Pyne told Front Office Sports on the latest episode of Portfolio Players.

Franchise values continue to go up, with each professional sports team deal seeming to break the record set by the last. The $6.1 billion sale of the NBA’s Celtics earlier this year was larger than the $6.05 billion sale of the NFL’s Commanders in 2023, which surpassed the previous record $4.65 billion price tag for the Denver Broncos sale in 2022, and so on.

For a frame of reference, the Grousbeck family, which is now selling the Celtics, bought the team in 2002 for $360 million. In 1999, Dan Snyder led the roughly $800 million purchase of the Commanders. And Pat Bowlen purchased the Broncos for $78 million in 1984. 

Talk about a return on investment.

“It’s been durable over 30 years; franchises have appreciated in value,” Pyne said.

There are multiple reasons why sports is so durable as an asset class, including escalating media-rights deals and a scarcity of assets. Additionally, sports are “one of the few last things on Earth that aggregates tens of millions—in some cases billions—of people together,” Pyne told FOS.

He described sports as the ultimate reality show, complete with heroes, villains, and storylines.

“It really is reality television,” he said. 

For investors, “the amount of money is just so overwhelming.”

Bruin has had a significant head start on many peers that popped up more recently, such as Arctos Partners, which was formed in 2019, Dynasty Equity, which launched in 2022, and the Mark Cuban–backed Harbinger Sports Partners, which is only a week old.

Although Pyne realizes franchise values are continuing to reach new heights, his firm is less focused on those investments. Bruin prioritizes the rest of the sports space, and it is especially interested in investing outside the U.S. Its portfolio companies include global sports technology and media company TGI Sport, as well as AS1, an international soccer player and coach representation agency.

Pyne said “75% of our invested capital is headquartered outside the United States,” that Bruin has “people on the ground” in 24 countries, and that it does business in 71 countries.

“The only continent we don’t do business in is Antarctica,” he said.