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I think ownership groups aren't uncommon in the small business world (as in not-startups, like family businesses). Totally different world but that's how sports

I think ownership groups aren't uncommon in the small business world (as in not-startups, like family businesses). Totally different world but that's how sports teams' acquisitions are handled these days.

yowlingcat 7y ago
Wow, that's fascinating -- I don't know too much about sports team acquisitions but it's pretty cool if that's how they work. If this is something you know more about, would you mind going into more detail about how that works?
- unlinked_dll 7y ago
  Historically teams (in the US) have been owned by a single person. But today, a sports team acquisition involves a 10-figure transaction and possibly the construction of a stadium if there's a move, which could also be in the low 10-figures. There are not that many individuals who can afford to buy a team by themselves. That's why they form ownership groups with a lead investor to be the "owner" face of the team (and sometimes, they'll get big names as minority stakeholders to give them legitimacy). An example of this is when an ownership group bought the Miami Marlins [1]. [1] https://www.nbcsports.com/boston/boston-red-sox/derek-jeter-group-buys-miami-marlins-12-billion https://www.nbcsports.com/boston/boston-red-sox/derek-jeter-... One difference with sports teams is that some members of the ownership group do it for vanity/ego/pride as much as an investment opportunity. There's a lot of prestige in having ownership of a major sports franchise, not only because it's incredibly expensive but because the opportunity to purchase a stake is not common and the entire ownership group is subject to approval from all the other owners in the league. So you can't just buy a team, you have to be ok'd by all the other teams.
- skinnymuch 7y ago
  The valuation of sports teams for the big 4 (and especially big 3 in terms of big numbers) has skyrocketed. It is quite possible from here on out that no NBA or MLB team will be sold for less than $1B total valuation. And no NFL team for under $2B. It’s a lot for individuals to pay. It’s rare for teams to be owned by companies or funds like the NBA’s Toronto Raptors. But even that holding company has one guy owning a third of it. Or NFL’s Green Bay Packers being a public company. Most leagues also have requirements for how much of the team can be paid for with debt, loans, etc. For a perspective on how crazy the skyrocketing valuations are, NBA and MLB teams outside major markets were going for under $500M and NFL teams for way under $1B. Major market teams were still going for a lot like NFL’s Washington DC Redskins went for over a billion 20 years ago, but even just five years ago the NBA’s Milwaukee Bucks went for around $500M. Now that they have a new stadium, sometimes that stuff is conditional on the purchase, their value has probably doubled (along with currently being a championship contender with an MVP superstar entering his prime). At this point, almost no individuals can take on a whole team purchase on their own. Or be able to pay up a higher price on their own. Exceptions are also people wildly richer than most owners like Steve Ballmer who’s around top 15 richest people and paid handsomely for the NBA’s LA Clippers, though he will also profit off it as well. Many, if not most, current big 3 majority owners would not be able to afford their own team if you looked at their net worth outside the team.

yowlingcat 7y ago

Wow, that's fascinating -- I don't know too much about sports team acquisitions but it's pretty cool if that's how they work. If this is something you know more about, would you mind going into more detail about how that works?

unlinked_dll 7y ago
Historically teams (in the US) have been owned by a single person. But today, a sports team acquisition involves a 10-figure transaction and possibly the construction of a stadium if there's a move, which could also be in the low 10-figures. There are not that many individuals who can afford to buy a team by themselves. That's why they form ownership groups with a lead investor to be the "owner" face of the team (and sometimes, they'll get big names as minority stakeholders to give them legitimacy). An example of this is when an ownership group bought the Miami Marlins [1]. [1] https://www.nbcsports.com/boston/boston-red-sox/derek-jeter-group-buys-miami-marlins-12-billion https://www.nbcsports.com/boston/boston-red-sox/derek-jeter-... One difference with sports teams is that some members of the ownership group do it for vanity/ego/pride as much as an investment opportunity. There's a lot of prestige in having ownership of a major sports franchise, not only because it's incredibly expensive but because the opportunity to purchase a stake is not common and the entire ownership group is subject to approval from all the other owners in the league. So you can't just buy a team, you have to be ok'd by all the other teams.
skinnymuch 7y ago
The valuation of sports teams for the big 4 (and especially big 3 in terms of big numbers) has skyrocketed. It is quite possible from here on out that no NBA or MLB team will be sold for less than $1B total valuation. And no NFL team for under $2B. It’s a lot for individuals to pay. It’s rare for teams to be owned by companies or funds like the NBA’s Toronto Raptors. But even that holding company has one guy owning a third of it. Or NFL’s Green Bay Packers being a public company. Most leagues also have requirements for how much of the team can be paid for with debt, loans, etc. For a perspective on how crazy the skyrocketing valuations are, NBA and MLB teams outside major markets were going for under $500M and NFL teams for way under $1B. Major market teams were still going for a lot like NFL’s Washington DC Redskins went for over a billion 20 years ago, but even just five years ago the NBA’s Milwaukee Bucks went for around $500M. Now that they have a new stadium, sometimes that stuff is conditional on the purchase, their value has probably doubled (along with currently being a championship contender with an MVP superstar entering his prime). At this point, almost no individuals can take on a whole team purchase on their own. Or be able to pay up a higher price on their own. Exceptions are also people wildly richer than most owners like Steve Ballmer who’s around top 15 richest people and paid handsomely for the NBA’s LA Clippers, though he will also profit off it as well. Many, if not most, current big 3 majority owners would not be able to afford their own team if you looked at their net worth outside the team.