Op-Ed: Sports Investing Is No Longer Just For The Ultra-Rich

As major sports leagues relax ownership rules and the value of expanded media rights surges, new private equity vehicles present Main Street investors the opportunity to claim their piece of the $460 billion global sports market, a figure expected to nearly double within the next 10 years. The sports sector’s long-term staying power, coupled with its entertainment crossover appeal, allows private equity firms to capitalize on ever-expanding revenue streams that offer investors timely entry to a previously inaccessible growth sector. Seriously, we’re talking everything from merchandising and media to technology and real estate. In simplest terms, technology and regulatory changes are expanding access for more investors through platforms like crowdfunding and simplified private equity investments. That expanding access is literally changing the sports investment game, so let me spell out a few benefits you might never have considered: ·       ROI: Sports investments, historically, yield higher than average long-term returns on investment when compared with other comparable asset classes. ·       Portfolio diversification: Sports investments can help you mix it up a little, from investment in youth sports leagues, pro sports teams, sports-focused gaming and venues to venue-related technology and ancillary development. ·       Recession resistant: Sports franchises – and their innumerable revenue streams – offer a potential hedge against market volatility. Loyal fan bases with disposable income aside, recurring revenue streams such as media rights and corporate sponsorships typically span multiple years, insulating franchises from temporary market disruptions. ·       Impact investing: Sports investments can also blend personal passions with tangible influence, creating the opportunity to contribute directly to regional community development ·       Exclusivity fading: Sports investments are no longer reserved for ultra-high-net-worth individuals. Without visibility, opportunity remains obscure, but access creates possibility. By normalizing increased access to these equity-building investments, we ultimately expand wealth-building capabilities to investors previously ignored in favor of institutions and ultra-high-net-worth individuals. And every day, that visibility and access increases. Retail investors are slowly gaining increased access to the sports investment space, new all-comer investment platforms are seizing their moment and high-profile celebrities and sports figures are leading by investment example, empowering an entirely new class of sector investors. According to data compiled by iCapital, more than half of the 153 professional teams across the NFL, NBA, MLB, NHL and MLS have inked no private equity deals to date, not to mention the largely untapped eSports, women’s sports and college sports spaces. As a co-founder of the National Black Bank Foundation (NBBF) – alongside fintech executive Ashley Bell and Bernice King, the youngest daughter of slain civil rights icon Martin Luther King Jr. and Coretta Scott King – I’ve been fortunate for the past five years to support financial inclusion and empowerment as the sports/entertainment banking landscape shifts to embrace a universe of financial institutions previously excluded. In this role, the NBBF facilitated Minority Deposit Institution (MDI) and Community Development Financial Institution (CDFI) participation in syndicated loans totaling an unprecedented $1.3 billion. A few highlights include: ·       Assisting with the NFL’s June 2023 announcement it was borrowing $78 million from 16 MDIs, CDFIs and minority- and women-focused banks to support and expand business opportunities with diverse enterprises across the country. ·       Arranging financing for the $200 million redesign of Baltimore Arena (June 2022), including Black-owned Harbor Bank of Maryland alongside juggernaut Truist Bank. ·       Enabling the (March 2022) Major League Soccer announcement that it would leverage a historic $25 million loan from a syndicate of Black banks, marking the first time any sports league has participated in a major commercial transaction exclusively with Black banks. ·       Arranging the December 2021 deal through which Black-owned Columbia Savings & Loan Association and Citizens Trust Bank were tapped to finance development of a $45 million Marriott hotel as part of a broader development plan with the Milwaukee Bucks. ·       Facilitating the Atlanta Hawks’ December 2020 decision to refinance their $35 million loan for their practice facility, making it the first major professional sports facility in the country financed solely by Black banks. Above all, we have got to normalize investing outside of traditional stocks, bonds and real estate, and – depending on the investor – sports investing brings above-average long-term ROI, portfolio diversification and recession-resistant impact investing to the table. Of course, this is not to say that sports investments are without risk – just ask anyone backing a money-losing franchise – but improved education about how to access emerging investment opportunities is a solid first step, followed immediately by intentional widening of access to those opportunities. Brandon Comer is managing partner of Alterity Capital, founder and CEO of Comer Capital Group LLC and a co-founder of the National Black Bank Foundation. *The content in this article is for informational and educational purposes only.  The information contained herein is not and shall not be construed as investment advice. It does not take into account your individual needs, investment objectives and specific financial circumstances  SEE ALSO: What Does Tyler Perry Own? A List Of The Billionaire’s Business Dealings Why Black Businesses In The US Never Had An Advantage