Should I Buy a Sports Franchise?

Owning a professional sports team has become increasingly attractive to successful entrepreneurs, executives, private investors, and family offices. Franchise values have risen dramatically, media rights continue to evolve, and the limited availability of professional sports franchises has contributed to investor interest and, historically, rising valuations in certain leagues.

But purchasing a franchise is not simply buying another investment. You’re acquiring a highly regulated operating business with employees whose salaries may exceed hundreds of millions of dollars, passionate customers who scrutinize every decision, league governance requirements, extensive media attention, and an asset that can influence nearly every aspect of your financial life.

Whether you’re considering sole ownership or joining an ownership group, the question becomes less, “should I buy a sports franchise?” and more, “does owning a sports franchise fit my broader vision for my wealth?”

If you’ve been curious about how to invest in a professional sports franchise responsibly, here’s a closer look at what prospective owners should consider before making one of the largest and most visible investments of their lives.

Why are you investing in a sports franchise in the first place?

This may sound like an obvious question, but it’s often the most important. Many owners have multiple motivations that overlap.

Perhaps you genuinely love the sport and want to preserve a franchise’s legacy. Maybe you see an opportunity to build enterprise value over several decades. Some investors are attracted by the prestige and influence that accompany ownership. Others view franchises as multigenerational family assets that can become part of their legacy.

None of these reasons is inherently right or wrong; however, understanding your primary motivation helps shape nearly every future decision, including your investment timeline, risk tolerance, operational involvement, succession planning, and more.

An owner primarily seeking long-term appreciation may make very different decisions than one hoping to win championships as quickly as possible.

Remember, a sports franchise is a business first

Fans experience wins and losses; owners manage an operating company. Franchise ownership generally must consider both competitive performance and financial sustainability. Professional sports organizations include many of the same business functions found in large corporations, such as executive leadership, finance and accounting, human resources, legal, sales and marketing, and others.

But sports owners also need to account for more nuanced operations, like stadium or arena operations, community relations, event security, and venue technology.

How do sports franchises make money?

The revenue streams for sports franchises are often as complex and varied as the departments needed to run them:

• Ticket sales
• Premium seating
• Sponsorships
• Local partnerships
• Media rights
• League revenue sharing
• Merchandise
• Licensing
• Special events
• Food and beverage operations

Winning consistently may contribute to attendance, sponsorship opportunities, merchandise sales, and long-term franchise value, but for many owners, discussions of financial stability extend far beyond the team’s win-loss record.

Is owning a sports franchise profitable?

It can be — but profitability and investment returns are not always the same thing.

For many owners, the larger financial opportunity has historically come from long-term franchise appreciation rather than annual cash flow. Because major league franchises are scarce assets with limited opportunities for purchase, their values have often increased over time. As a result, an owner may realize a substantial return when selling the team, even if annual operating profits were modest.

Prospective buyers should also remember that sports franchises are typically illiquid, concentrated investments. Purchasing a team may require significant ongoing capital commitments, and there is no guarantee that future appreciation will mirror historical trends.

League rules add another layer of complexity

Unlike many privately owned businesses, professional sports franchises operate within league governance structures, and owners must often navigate requirements related to:

• Ownership approval processes
• Debt limitations
• Revenue-sharing agreements
• Salary caps or luxury taxes (where applicable)
• Competitive balance rules
• Collective bargaining agreements
• Franchise relocation restrictions
• League governance votes

Each league maintains its own operating rules and ownership standards, meaning buyers often undergo extensive financial review before transactions even receive approval.

Sports owners are a small club under immense scrutiny

Unlike most private businesses, sports franchises operate under constant public attention. Every coaching hire, player trade, draft pick, ticket price increase, and losing season becomes the topic of public (and sometimes heated) conversation almost in real time.

Owners should be comfortable operating in an environment where business decisions receive extensive media coverage and passionate fan reaction.

Managing employees, personalities, and egos

In addition to the thousands of employees working games, scouting players, and offering medical support, sports organizations employ individuals with exceptionally public careers. Professional athletes, coaches, executives, broadcasters, and team leadership often become public figures whose performance is discussed daily by fans and media alike.

Some owners focus their efforts on hiring experienced executives, establishing accountability, and allowing the professionals who have dedicated their lives to playing or coaching sports at an elite level to do their jobs.

How hands-on should an owner be?

One of the biggest strategic decisions involves determining your role after the purchase. Some owners become deeply involved in organizational decisions; others operate more like board chairs, setting strategic direction while delegating daily operations to experienced executives.

Neither approach is automatically superior. Instead, owners should honestly assess:

• Do I possess relevant operational expertise?
• Am I comfortable delegating?
• Do I want this to become a second career?
• Am I investing primarily for financial returns?
• How much time am I prepared to commit each week?

Attempting to personally manage every aspect of a franchise can create operational bottlenecks and make effective delegation more difficult.

The benefits of owning a sports team outright vs. joining an ownership group

Today’s buyers have multiple pathways into professional sports ownership:

Sole ownership

Owning a controlling interest generally offers the highest level of authority and flexibility.

Advantages may include:	Potential drawbacks include:
– Complete strategic control – Unified decision-making – Greater influence over organizational direction – Simplified governance	– Larger capital commitment – Greater concentration risk – Increased personal responsibility – Higher liquidity demands

Ownership groups

Many modern franchises are owned by groups consisting of families, private investors, institutional capital, or strategic partners.

Benefits often include:	Challenges may include:
– Shared financial commitment – Potentially lower individual capital exposure – Broader expertise – Additional capital for future opportunities	– Shared decision-making – Governance complexity – Potential disagreements regarding strategic direction – Exit planning among partners

For some investors, minority ownership provides exposure to professional sports without assuming responsibility for daily organizational leadership.

Tax and estate planning implications of franchise ownership

A sports franchise often becomes one of a family’s largest assets. That creates significant planning opportunities, as well as responsibilities. Prospective owners should consider asking themselves:

• Should ownership reside personally or within an entity?
• How should future ownership transfers occur?
• Will heirs actively participate in franchise governance?
• Should voting and economic interests be separated?
• How will estate taxes affect ownership continuity?
• Is there adequate liquidity elsewhere in the estate?

These decisions become even more important when multiple generations or family branches are involved. Without appropriate planning, ownership transitions can create unnecessary conflict or force the sale of a treasured family asset.

Integrating the franchise into a broader wealth plan

Buying a sports franchise shouldn’t happen in isolation. Like the sale of a closely held business, acquiring a major professional sports asset can reshape nearly every component of your financial picture. Because the investment is so unique, it deserves to be evaluated alongside every other significant financial objective rather than as a standalone purchase.

Considering buying a sports franchise? You need a financial quarterback.

Purchasing a professional sports franchise represents far more than acquiring a business. It can become a defining component of your family’s financial legacy, requiring careful coordination between investment strategy, tax planning, estate planning, liquidity management, and long-term governance.

At Avidian Wealth Solutions, we help successful entrepreneurs, executives, and families evaluate significant financial decisions within the context of their broader wealth plan. Whether you want to buy a sports franchise, are preparing for a liquidity event that could make franchise ownership possible, or are assessing how such an acquisition would affect your portfolio and legacy, our role is to help you evaluate and coordinate the financial-planning considerations

associated with the decision, working with your legal and tax professionals as appropriate.

The franchise may be the headline, but your overall financial plan should remain the foundation. Schedule a conversation with an advisor in Houston, Austin, Sugar Land, or The Woodlands to explore your options.

Disclosure:

This article is provided for informational purposes only and should not be construed as investment, legal, tax, or accounting advice. Investing in private businesses, including professional sports franchises, involves substantial risks, including illiquidity and the potential loss of capital. Prospective buyers should consult with qualified legal, tax, and financial professionals before making any investment decisions. Avidian Wealth Solutions provides comprehensive wealth management services but does not provide legal or tax advice.

More Helpful Articles by Avidian: 

• Understanding Capital Gains Tax in Texas
• What to Consider Before Buying a Second Home Abroad
• How to Merge Finances after Marriage
• When to Consider an OCIO for Your Endowment
• What Is a Side Letter?

Reviewed By:

Shaheen Ladhani

Managing Partner

Avidian's wealth planning articles are reviewed for accuracy and alignment with current industry standards by Shaheen Ladhani, Head of Avidian's Endowment and Foundation practice, who brings over a decade of experience managing portfolios for private clients, endowments, and foundations.

---

Please read important disclosures here