Everyone is talking about private equity moving into sports. And rightfully so, it’s polarizing and represents a real institutional shift. That’s the right observation and the wrong conclusion.
The Lakers sold for $10 billion last year. The Celtics went for $6.1 billion months earlier. The NFL finally opened to institutional PE ownership in 2024. Ares moved into the Dolphins. Arctos took a stake in the Bills. KKR’s $1.4 billion acquisition of Arctos just got league approvals and closed this week.
The headlines write themselves: sports is now a bona fide asset class.
What the headline misses is more interesting. The firms that understand sports best aren’t primarily buying franchises. They’re building financial infrastructure around them, and doing it across a much wider surface area than most dealmakers realize.
Under-Levered, Over-Equitized, and Wide Open
Franchise valuations have compounded at roughly 13% annually since 2000, outperforming equities, bonds, and inflation over that span. Globally, sports media rights now exceed $60 billion annually, with the NFL alone generating $10-12 billion in US broadcast deals, and the NBA, European futbol, and international cricket accounting for the rest. Those long-term contracts underpin franchise valuations with recurring cash flows that look a lot like infrastructure.
And yet, they don’t get financed like it. The average franchise carries roughly 10% loan-to-value. Real estate runs 40-70%. The gap isn’t explained by risk. It’s a legacy of conservative ownership culture, league-level debt restrictions, and decades of equity-led financing that left balance sheets over-equitized and illiquid.
Apollo’s sports capital team built its entire thesis around that inefficiency. Rather than taking minority equity stakes with no control, six-year lock-ups, and league approval requirements, they’re deploying hybrid capital. Preferred instruments with contracted coupons and upside participation through profit-sharing or warrants. Franchise owners get liquidity without diluting control. Apollo gets contracted cash flows as collateral.
That’s an entirely different conversation than buying a piece of the Dolphins.
A few honest caveats. A 13% CAGR off a much lower base doesn’t automatically translate at today’s entry prices. At double-digit revenue multiples, forward returns may look closer to high single digits than the appreciation of the past two decades. The infrastructure analogy also has limits; unlike regulated utilities, sports media contracts carry renegotiation risk. Cord-cutting continues to add pressure, and streaming platforms may not renew at the same escalators. That said, even when current rights holders choose not to renew, there’s usually another suitor who’ll happily pay the asking price.
There’s also a structural question the Apollo thesis doesn’t fully answer. Leagues may cap leverage for reasons that have nothing to do with inefficiency. Competitive balance, franchise stability, CBA politics. Whether 10% LTV is an arbitrage opportunity or a deliberate feature depends on who you ask.
Where Valuation Discipline Actually Matters
While everyone debates NFL and NBA franchise valuations, the more interesting deals are in leagues still finding their footing and price.
The NWSL is the clearest example. Bay FC launched in 2023 with a $53 million expansion fee. Angel City sold last year at $250 million. The league allows PE to take majority control, up to 100% ownership, of a single franchise, which no other major US league permits. Sixth Street built Bay FC from scratch. Carlyle is in the Seattle Reign. Marc Lasry’s Avenue Sports Fund just took a stake in the North Carolina Courage. Women’s sports is a great bet, and firms are willing to cut checks behind that belief.
The risks are still very real, though. Top players may still leave for European leagues, and revenue, currently, is concentrated in a few coastal markets. A $250 million valuation implies a significant bet on long-term growth for a league still building its media rights base. For now, entry is still somewhat broadly accessible. The underwriting requires discipline.
Pickleball is a different kind of bet. Apollo Sports Capital led a $225 million investment into Pickleball Inc., the new parent of Major League Pickleball and the PPA Tour. The sport has been the fastest-growing in America for at least four consecutive years, boasts 24 million US players, and generated $140 million in combined revenue in 2025. Market projections range from $4.4 billion to $9.1 billion by 2033-2034, depending on the source. Apollo’s thesis moves beyond just franchise equity into broader ecosystem consolidation across media, events, retail, and infrastructure.
It’s worth noting: upstart leagues have a history of failure. The XFL collapsed twice. Several soccer iterations burned through capital before MLS found stable footing. MLP itself only recently merged its rival tours and is targeting team-level profitability by 2027. Apollo’s consolidation bet may prove correct. It also concentrates risk if the ecosystem doesn’t hold together.
Professionalization of once purely recreational sport doesn’t stop there. League One Volleyball raised $160 million from Ares and Atwater Capital, with the Houston Texans affiliate and David Blitzer now among its team owners. Same pattern, earlier stage.
College Athletics Broken Balance Sheets
RedBird Capital and Weatherford Capital recently closed the first PE-backed deal with a major Division I conference, partnering with the Big 12 through their Collegiate Athletic Solutions fund. The structure gives $12.5 million to the conference directly, plus a $30 million capital credit line available to each member school, up to $500 million across the conference collectively. Notice, no mention of equity. The fund participates in revenue generated under the partnership. Private credit structured against future media rights.
The financial pressure is real. With the House settlement, schools are now permitted to share up to 22% of average power conference revenue with athletes. Many are limiting payments to football and basketball only, which makes sense given those are typically the largest revenue producers, but the ceiling is rising, and the budget math is getting harder. An enrollment cliff compounds it: roughly 15% fewer Americans of traditional college age will be enrolling between 2025 and 2039.
That creates demand for creative capital structures. It also creates political exposure. RedBird’s deal is already drawing scrutiny from faculty and administrators worried about conflicts between financial returns and institutional integrity. Further antitrust and employment law actions following House v. NCAA could change the economics again. The opportunity is real but so are the regulatory risks.
The Structure Is The Strategy
Sports is no different from any other asset class that went through institutionalization. For GPs, family offices, and HNWI capital, the more accessible entry points are in emerging leagues, their blossoming ecosystems, and the syndicate structures beginning to open to non-institutional investors. Yes, there’s outsized risk, but the rules are still being written. Fortune favors the bold.
This is purely informational and should not be seen as investment advice.
Sources
Apollo Global Management: The Financing Gap in Sports: Unlocking a $2.5 Trillion Opportunity, December 2025
Oaklins Spot On: Sports, March 2026
Sportico: NWSL franchise valuations and transaction reporting
CNBC: Apollo Sports Capital leads $225 million investment in Pickleball Inc., May 2026
Business Wire: KKR Closes Acquisition of Arctos Partners, May 5, 2026
2026 SFIA Annual Report — pickleball participation data
Market.us: global pickleball market projections
House v. NCAA settlement
Oaklins / Mergermarket
Broken LOIs and How Deals Are Dying Differently
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