Billionaire families choose to buy sports teams rather than art and cars

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for the high-net-worth investor and consumer. subscription To receive future issues, directly to your inbox.

For the wealthy, sports teams have evolved from status symbols into mainstream investment assets, according to a new study by private bank JPMorgan.

The bank’s 23 Wall division, which caters to 0.01%, surveyed 111 billionaire managers of private family investment firms, representing more than $500 billion in combined wealth, between March and August. 20% of family office managers reported that they own controlling stakes in sports teams, up from 6% in 2022.

Sports assets also outpaced traditional assets such as art and cars, with 34% of school principals investing in teams and arenas, compared to 23% in art and 10% in cars, the bank said.

Andrew Cohen, CEO of JPMorgan’s Global Private Bank, told Inside Wealth he expects this trajectory to continue. He said sports team valuations continue to rise, supported by media rights and sponsorship deals, providing strong returns. The bank values ​​US and European franchises at about $400 billion combined, and estimates the total value of mergers, acquisitions and sports investments has increased eight-fold over the past five years.

Cohen added that ownership of sports teams sparks a desire for entrepreneurship in a way that other hobbies cannot. Many school principals hold board seats or are active in franchise operations, he said.

“Unlike art or cars, sports ownership provides school administrators with a platform for active engagement,” he said. “This hands-on approach is consistent with the broader trend of families seeking to be ‘active architects’ rather than passive investors.”

While the growth of the sports industry has attracted investors beyond passionate fans, Cohen said many school administrators report motivations beyond financial returns. He cited the desire to bring the family together as a key driver for sports team owners. Women’s team owners are also more likely to say they support women’s sports “to help level the playing field,” according to the report.

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

Hard-hitting family offices often take multiple actions when investing in sports. For example, Blackstone’s David Blitzer, the first person to own shares in all five major US men’s sports leagues, has backed at least six sports companies this year, including a swing club chain and a betting app, through his family office Bolt Ventures.