High-net- worth (HNW) and Emerging Wealth individuals, families, and businesses have seen an evolution in business practices over the past several years. As the wealth of HNW families and businesses has increased, the number of family offices has also increased. Additionally, more HNW families have changed the structure of their businesses to satisfy the goal of having greater control over their operations and wealth. As a result, these individuals and business entities have to consider responsibilities that include succession planning, governance, tax, executive coaching, investments, compliance, technology, cybersecurity and data protections, talent acquisition and management, and environmental and social responsibility to name a few.
The Rise of Sports Investments
In recent years, family offices have been diversifying their investment portfolios, with a growing focus on the dynamic world of sports. Statistics from a recent Family Office Association survey reveal that 42% of family offices have allocated funds to sports investments in the past five years1. This surge in interest is not limited to traditional sports like football and basketball but extends to emerging markets such as cricket and pickleball.
Balancing Portfolios with Sports Investments
For HNWIs and family offices, sports investments offer a unique blend of emotional and financial returns. Andrew Schneider, Founder of Family Office Networks, explains, “Sports offer a unique blend of emotional and financial returns. Family offices are drawn to the passion and engagement of sports fans, which translates into profitable business opportunities”1.
Alternative Investments in Sports
Sports investments fall under the category of alternative investments, which are crucial for creating a balanced portfolio. These investments can include:
- Team ownership
- League stakes
- Sports technology startups
- Media rights
- Stadium real estate
By incorporating sports into their investment strategy, HNWIs can potentially achieve higher returns while diversifying risk across different asset classes.
Private Equity’s Growing Role
Private equity (PE) firms are playing an increasingly significant role in professional sports. As of August 2024, PE firms hold minority ownership stakes in teams across the MLB, NBA, MLS, and NHL, with collective estimated worth of $147.7 billion11. This trend is expected to continue as the need for liquidity and growth capital increases in the sports industry.
NFL Opens Doors to Private Equity
In a landmark decision, the NFL recently voted to allow private equity funds to buy stakes in NFL teams, albeit with certain restrictions. PE funds can now own up to 10% of any given NFL team, though without voting rights3. This move aligns the NFL with other major sports leagues that have already embraced private equity investments.
Private Credit Opportunities
While not explicitly mentioned in the search results, private credit is another avenue that family offices and HNWIs might explore in the sports industry. This could involve providing loans to teams for stadium improvements, financing player transfers, or supporting other sports-related businesses.
Building a Balanced Portfolio
For HNWIs and family offices, sports investments should be part of a broader, balanced portfolio strategy. This typically includes:
- Traditional assets (stocks, bonds)
- Real estate
- Alternative investments (including sports)
- Cash and cash equivalents
The key is to create a mix that aligns with the investor’s risk tolerance, financial goals, and investment horizon2.
Conclusion
As family offices and HNWIs continue to explore new frontiers in investment, sports have emerged as an exciting and potentially lucrative option. By combining the passion of sports with sound investment principles, these investors are not only diversifying their portfolios but also shaping the future of professional sports. As Andrew Schneider notes, “The diversification into sports is not just about financial returns; it’s about aligning with family values, fostering community engagement, and creating a legacy”1.
For those considering entering this space, it’s crucial to approach sports investments with the same rigor as any other investment. Due diligence, market analysis, and a clear understanding of the unique dynamics of the sports industry are essential for success in this exciting and evolving sector.
This is just one of the many issues HNW families and business must consider in the near term.
Seth Tuman is the Chief Administrative Officer at 2GO Advisory Group and co-leads the Family Office Practice Group. With more than 20 years of experience managing resources, budgets, and financials, he works with stakeholders and employees to establish and meet goals while fostering client relations. He supports the day-to-day operations and management of budgets, payroll, accounting systems, financing, and banking matters — including compliance and fraud protection for his clients.
Seth has established trusted relations with the companies listed below. Their teams of dedicated, experienced professionals can provide comprehensive Advisory, Legal, Investment, Banking and other related business support to HNW and Emerging Wealth individuals and entities.
The experienced attorneys at Hanson Bridgett LLP offer comprehensive legal services, counsel, and guidance to HNW individuals and families looking to setup and manage family office structures, private trusts, and foundations to meet their investment and philanthropic objectives. The multidisciplinary approach includes attorneys from a broad range of practice areas who have experience assisting HNW individuals and businesses achieve their goals throughout their entire enterprise cycle. Visit www.hansonbridgett.com or contact Eric Clarke, Partner, at (925) 746-8470.
Parallel Advisors services their family office clients in tax optimization, liquidity and exit planning, private investment access, trusts & estates, Philanthropy, lifestyle resources and concierge services. By forming Parallel Advisors as a team, with all principals as owners, the entire team is aligned to pursue the best interests of all Parallel Advisors’ clients. They work together toward the success of all, contributing our own unique talents in a culture and organizational design focused always on client outcomes first and foremost. Visit www.paralleladvisors.com or Ray Polin, Wealth Advisor, at (415) 728-9166.
The First Bank Center for Family-Owned Businesses (CFOB) was established to support family businesses through specialized resources, networking opportunities, and guidance tailored to their unique challenges. First Bank, a 4th generation, privately held, family-owned bank, has a long history of serving family-owned enterprises. In addition to the bank traditional lines of businesses, of lending and providing treasury management services, the CFOB offers services such as consulting, workshops, webinars, and an online Family Business Resource Center. Visit www.first.bank/ or Gene Seip, SVP – Relationship Manager, at (925) 787-9166.
Grobstein Teeple LLP is a full-service CPA and advisory firm serving businesses, nonprofits, and high-net-worth individuals. Their comprehensive offerings include cybersecurity (including forensics, risk management, and CISO services), transactional support (due diligence, QOE, financing), and assurance services (audits, reviews, IPO prep). They also provide tax planning and compliance, including trust and estate strategy and IRS representation. The firm offers litigation consulting, expert witness services, and turnaround support for financially distressed entities. Additionally, they advise on business transitions, succession planning, and internal controls—making them a trusted partner for complex challenges. Visit www.gtllp.com or contact Howard Grobstein, Managing Partner, at (818) 532-1020.
For your Talent needs in direct hire, full-time or part-time contract staffing, contact Executive Recruiter, Leesa Meintzer at leesa@2gorecruiting.com.
Leesa Meintzer is an executive recruiter with more than 20 years of experience in talent acquisition. She excels in partnering across various business functions and brings a comprehensive perspective to talent acquisition. She works with Engineering, Healthcare, Product, Finance, Accounting, Business Operations, Sales, Legal, Human Resources, Learning & Development, and Talent Acquisition for corporate and high-growth start-ups. .