Investing in the Game: Private Equity’s Playbook in Professional Sports Teams
A while back, I shared insights on private equity investments in sports franchises—particularly focusing on CPS Arctos Sports Fund I. This fund stands out as one of the largest investors across major and minor professional sports leagues, holding stakes in:
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3 NBA franchises
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3 NHL franchises
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2 MLS franchises
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7 MLB franchises
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3 European football (soccer) teams
And that’s not all—Arctos also invests heavily in minor league teams across all sports. Between 2021 and 2022, billions of dollars flowed into sports franchises, with European soccer giants like AC Milan and Chelsea FC seeing major investments.
Arctos Sports Fund I: A Winning Play
Arctos closed its first fund in 2021, raising an impressive $2.9 billion and making 25 investments in professional teams. This positioned Arctos as a leading private equity player in North America’s sports ownership landscape.
Why do leagues welcome private equity firms into team ownership? Simple economics: more investors equal increased demand. And since professional sports teams are limited in number, this high demand drives up team valuations—benefiting existing owners and new investors alike.
My Investment Experience
I was fortunate to gain approval to invest in Arctos Fund I. The fund is private and not publicly traded, so investment requires vetting and approval. What this means practically is that I own a small piece of a fund that itself owns small stakes in a portfolio of sports teams.
Thanks to Arctos’ diversified holdings, risk is spread across multiple franchises, leagues, and even countries. And while my personal stake is modest, the structure allows me liquidity to sell my share when desired—hopefully at a healthy profit.
The Sequel: Arctos Sports Fund II
Just like blockbuster movie sequels that surpass expectations (Top Gun: Maverick, Avatar: The Way of Water), Arctos is launching Fund II with strong momentum. Launched in late 2021, Fund II targets $2.5 billion and is expected to close by mid-2025.
Fund II brings strategic advantages:
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Exclusive approval to invest in four major U.S. leagues: MLB, MLS, NBA, and NHL
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A focus on fewer but larger investments ($50 million to $500 million vs. $20 million to $400 million previously)
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A targeted portfolio of 15 to 20 high-impact sports franchise stakes
Why Fund II Looks Like a Smart Bet
Fund I’s performance tells a compelling story. As of September, it delivered:
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A net multiple of 1.51x (meaning investors have gained 51% more than their invested capital)
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A jaw-dropping net internal rate of return (IRR) of 86.7%
Given those returns, Fund II’s $2.5 billion target suggests strong upside potential for investors who join this next chapter.
Final Whistle
Private equity investment in sports teams is reshaping the way we experience sports ownership—turning it into a high-stakes, high-reward financial game. With its unique league access, diversified portfolio, and impressive track record, Arctos Sports Partners Fund II is poised to continue scoring big for investors.