During the past decade or so, the world’s most valuable sports brands have been using their wealth and their connections with other great sports assets to expand their sports holdings into everything from media to real estate to other sports teams and stadium operations in historic fashion.
It’s all about packaging with scale, asset diversification and tax breaks.
The supreme leader: Kroenke Sports & Entertainment, worth $8.4 billion. Stan Kroenke’s empire began with the purchase of the NHL’s Colorado Avalanche and the NBA’s Denver Nuggets in 2000, along with the Pepsi Center, the arena the teams share, for a combined $400 million. A decade later, he bought the 60% that he didn’t already own of the NFL’s Rams—then in St. Louis, now in Los Angeles—in a deal valuing the team at $750 million. The three teams are now worth a combined $5.7 billion, by Forbes’ estimate.
Kroenke’s global push began in 2007 when he bought shares in the Premier League football club Arsenal. Last year, he took full control of the club, now worth $2.3 billion. KS&E also owns the Colorado Rapids of Major League Soccer, the Colorado Mammoth of the National Lacrosse League, the regional sports network Altitude Sports & Entertainment and a pair of esports franchises (the Los Angeles Gladiators and the Los Angeles Guerrillas), bringing KS&E’s total enterprise value to $8.4 billion.
Kroenke’s global push began in 2007 when he bought shares in the Premier League football club Arsenal. Last year, he took full control of the club, now worth $2.3 billion. KS&E also owns the Colorado Rapids of Major League Soccer, the Colorado Mammoth of the National Lacrosse League, the regional sports network Altitude Sports & Entertainment and a pair of esports franchises (the Los Angeles Gladiators and the Los Angeles Guerrillas), bringing KS&E’s total enterprise value to $8.4 billion.
Fenway Sports Group was an early adopter of the bigger-is-better mentality with its vertically integrated sports model. FSG’s assets, worth $6.6 billion, come from baseball, football, Nascar, cable TV and sports marketing. So when Best Buy decided to stop sponsoring the Boston Red Sox, FSG kept the marketing dollars in the family by directing the retailer to its Nascar team, Roush Fenway Racing. Sports marketing client LeBron James sold his buddy Jay-Z on Fenway Park when the rapper was in search of a Boston concert venue. One hand feeds the other.
This trend will continue. In 2018, NFL owners voted to lift the league’s longstanding cross-ownership prohibition, meaning they are now free to own a professional sports team in a different city that has an NFL team. The NBA, MLB and the NHL already permitted owner of one of their teams to be a controlling owner in the other leagues. Debt limits for owners have also recently been boosted, giving them more money to leverage their equity to build stadiums.
Investors are buying into these empires. Private equity firm Silver Lake recently purchased 10% of City Football Group at a $4.8 billion valuation. City Football Group, which owns controlling stakes in the Premier League football team Manchester City, MLS’s New York City FC and Australia’s Melbourne City FC and has investments in other sports teams, is ranked seventh among the top 10 sports empires. Silver Lake, it should be noted, also owns nearly 2 million shares of the publicly traded Madison Square Garden Company, which includes the NBA’s New York Knicks, the NHL’s New York Rangers and their arena and is ranked fifth on our list with a $5.9 billion valuation.
The NFL’s newest owner, David Tepper, is mobilizing his billions. He paid $2.3 billion last year for the Carolina Panthers. This week, MLS awarded its 30th franchise to Tepper in Charlotte for an expansion price of up to $325 million.