A worldwide inflation crisis likely won't derail the Glazer family's ability to sell Manchester United or Dan Snyder's chances at unloading the NFL's Washington Commanders, according to experts.
Inflation surged this year to levels unseen for four decades, slowing the economy and raising prices for consumers from the checkout line to the gas pump. For the most part, sports are no exception: Rising costs are making it more expensive for fans to go to games, for families who participate in youth sports and for college athletic departments trying to stay on budget.
But the millionaires and billionaires who own sports team won't be feeling the pinch, whether it's the day-to-day cost of running the business or the sale price when they decide to move on. On the contrary: A franchise can be a safe place to park money and ride out a bear market.
'I'm resting pretty easy if I'm an owner,' said Tim Clarke, a senior analyst at PitchBook, which researches private financial markets. 'That's how people are viewing assets of the professional sports industry. They're just not going down.'
'I do think there is somewhat of a hedge,' agreed Inner Circle Sports CEO Rob Tillis, who has worked on the sale of dozens of teams in all four major U.S. pro sports and the top international leagues. 'I have been doing this for 30 years. We've been through lots of business cycles and valuations have been strong. I don't see that as any different now.'
Most sports owners are also well-capitalized enough to keep their team budgets separate from their outside business and other sources of wealth. So even though rising interest rates have cooled the housing market, that's unlikely to affect Cleveland Cavaliers and Rocket Mortgage owner Dan Gilbert, who with an estimated net worth of almost $52 billion is the 23rd-richest man in the world, according to Forbes magazine.
Of course, New York Mets fans will be quick to point out one major exception: Losses in the Bernard Madoff Ponzi scheme squeezed the club's payroll and forced owner Fred Wilpon to sell off first part, then the rest of the team.
'These guys, they have so much money that I think if they start to get pinched elsewhere, it's more or less a rounding error for their clubs,' said Tom Pitts, the European head of LionRock Capital, a private equity firm that has a one-third interest in the Inter Milan soccer team. 'Most of these guys haven't stretched to buy the club. It's an expensive hobby.'
Rising interest rates could make it more expensive for would-be owners to buy into the club if they have to borrow money to pay for their new prize. 'It just costs a lot more money in absolute dollars to service the debt,' Pitts said.
A handful of high-profile teams are currently on the market.
Snyder, the Commanders owner, is under pressure to sell his team after an investigation revealed a toxic corporate culture. Last month he announced that he would consider unloading all or part of the once-proud NFL franchise. It is expected to fetch even more than the $4.65 billion paid for the Denver Broncos this summer by Walmart heir Rob Walton, who with an estimated net worth of $61 billion is the 16th-richest person in the world.
Robert Sarver has put his teams, the NBA's Phoenix Suns and the WNBA's Phoenix Mercury, on the market after an investigation found evidence of a racially and sexually insensitive workplace. Baseball's Washington Nationals are for sale and the family that owns the Baltimore Orioles has made noise about selling, as well. The NHL's Ottawa Senators can also be had for the right price.
Two of English soccer's biggest names, Manchester United and Liverpool, are also on the market. Man U. was valued by Forbes in September at $4.6 billion — just a bit higher than Liverpool; both are expected to eclipse the $3.2 billion price paid for Chelsea this spring that was briefly the highest ever for a sports team.
That record was less than two weeks old when the Broncos deal was announced.
'You've got the likes of the Waltons, and it's a drop in the bucket,' Clarke said. 'It's a club. It's like, 'When is the next Picasso up for sale?' ... The value sector has nothing to do with the economy. There's always demand and there's always scarce supply.'
Apple's reported interest in buying Manchester United has been predictably well received by Red Devils fans, who think of the current owners' tenure like a 17-year root canal.
'There is euphoria within the United fan base right now,' The United Stand contributor and long-time supporter Adam Scott told British news channel, GBN.
Since buying the club in 2005, the American Glazer family has been criticized as disinterested, incapable, and unwilling to improve a team that has historically ranked as one of the best in Europe.
Not only is Manchester United facing a decade-long title drought – particularly troubling for a club that won five Premier League titles in the first eight seasons of the Glazers' reign – but its future prospects aren't encouraging. Old Trafford, the division's oldest stadium, is in disrepair, and the Glazers' reluctance to invest in the team's infrastructure is seen by fans as pure greed.
'The stadium is deteriorating,' Scott told GBN.
'No disrespect to them, but Manchester United's infrastructure has been sidestepped by the Glazers, and the money just seems to be going into them. The dividends taken out of the club year on year and lack of investment - it's just been too much for the fans.'
Scott was speaking Thursday, days after the Glazer family confirmed rumors that the club was for sale. Since then, a report from the Daily Star has claimed that Apple may be interested in acquiring the team for roughly $7billion – a relatively small fortune for a company valued at more than $2trillion.
If the deal does come to fruition, Manchester United would boast the richest owners in sports, eclipsing the $620bn Saudi Arabian Sovereign Wealth fund that controls Newcastle United.
Other parties with reported interest in Manchester United are British billionaire Jim Ratcliffe as well as former England captain and United midfielder David Beckham, although he would likely need a group of investors for a competitive bid.
