Sports teams are ridiculously expensive. They’ve always been expensive, but in the last 20 years things have gotten crazy. When Bob Castellini’s group purchased the Cincinnati Reds in 2006 the purchase price was $270M, for what turned out to be a 70% share of the team. Today the Cincinnati Reds are valued at $1.05B according to Forbes.
The Reds are one of the least valuable professional sports franchises among the big three professional sports. But if you wanted to buy them, assuming they were for sale, you’d need to spend over a billion dollars. There are only so many people, or even groups of people, who have that kind of money and interest in owning a sports franchise. With the explosion of valuations of teams the NFL, NBA, and now MLB are looking at alternatives for how and who they were willing to allow buy into teams.
The NFL began to explore changing the rules to increase the amount of debt prospective team owners would be allowed to take on as they struggled to find people that could actually afford to buy a team. The NBA began to look into the idea of allowing people to invest in teams as “minority owners” who could buy into a team without previously being a part of the ownership group.
It seems that Major League Baseball is doing something very similar to what the NBA explored. Bloomberg is reporting that there’s a plan in place, and already an investment firm in place that’s seeking out investors. There’s a minimum contribution of $1M, so maybe you need to tap into that 401k – but it’s certainly interesting to think that someone well-off, but not Jeff Bezos rich could own a piece of a professional sports team.
Obviously the teams would have to be willing to open up shares/stakes in order to be bought into. Which teams that makes the most sense for – that’s a question that’s far beyond my understanding. But one would think that small market teams that could use a little bit of extra money would certainly be open to it more so than say, the New York Yankees who seem like they can print money if and when they need it.
So to bring this all full circle – maybe start planning on investing your life savings in the Cincinnati Reds. Maybe they’ll be one of the teams that opens up this door for future investors and you can go hang out and maybe get all of the Graeter’s and Skyline your heart desires as a limited partner of the Reds at Great American Ballpark one of these days.