Prices of professional sports teams keep going up, inflation or not

Inflation doesn’t hurt sports team owners’ funds.

In fact, it might help.

While the ultra-wealthy will have to pay a little more for eggs at the grocery store — just like everyone else — inflation is unlikely to affect the bottom line of their sports fortunes.

“If I’m the owner, I have peace of mind,” said Tim Clark, a senior analyst at PitchBook who covers private financial markets. “That’s how people see assets in the professional sports industry. They just don’t go down.”

Inflation has soared this year to levels not seen in four decades, slowing the economy and raising prices for consumers from the checkout line to the gas station. For the most part, sports are no exception: Rising costs are making it more expensive for fans attending games, families playing youth sports, and college athletic departments trying to keep their budgets in check.

But millionaires and billionaires who own sports teams don’t feel the pinch, whether it’s the day-to-day cost of doing business or the sale price if they decide to walk away. On the contrary: A franchise can be a safe place to park your money and ride out a bear market.

Photos: Inflation or not, pro sports team prices keep rising

“I do think there’s some sort of hedge,” said Inner Circle Sports Chief Executive Rob Tillis, who has been involved in sales of dozens of teams in the four major U.S. professional sports and the top international leagues. “I’ve been in this business for 30 years. We’ve been through a lot of business cycles and valuations have been high. I don’t think it’s any different now.”

Most sports owners also have sufficient capital to separate their team budgets from outside businesses and other sources of wealth. So while rising interest rates are cooling the real estate market, it’s unlikely to affect Dan Gilbert, owner of the Cleveland Cavaliers and Rocket Mortgage, whose net worth is estimated at nearly $52 billion, according to Forbes magazine, the No. 1 in the world. 23 billionaires.

(One exception: Losses from the Bernard Madoff Ponzi scheme squeezed payroll for the Mets, forcing owner Fred Wilpon to sell first part, then the rest of the team.)

“These guys, they have so much money, I think if they start getting squeezed elsewhere, it’s more or less a rounding error for their club,” said Tom Tom, European head of private equity firm LionRock Capital. Pitts said. A third interest is in the Inter Milan football team. “Most of these people didn’t pay for the club. It’s an expensive hobby.”

Rising interest rates could make buying clubs more expensive for would-be owners if they have to borrow money to pay for their new bonuses. “In absolute dollar terms, it’s just going to cost more to pay down the debt,” Pitts said.

There are currently a handful of well-known teams on the market.

Washington Commanders owner Dan Snyder, under pressure to sell his team after an investigation revealed a toxic corporate culture, said he would consider selling all or part of his once-proud NFL franchise. It is expected to sell for even more than the $4.65 billion paid for the Denver Broncos this summer by Walmart heir Rob Walton, whose estimated net worth is $61 billion and ranks No. 1 on the world’s richest list. 16 bits.

Robert Sarver has put his teams — the NBA’s Phoenix Suns and WNBA’s Phoenix Mercury — on the market after an investigation found evidence of a racially and gender-insensitive workplace. Baseball’s Washington Nationals are for sale, and the family that owns the Baltimore Orioles has also offered to sell. The NHL’s Ottawa Senators are also available for the right price.

The two giants of English football, Manchester United and Liverpool, are also on the market. Forbes valued United at $4.6bn in September – just above Liverpool; both are expected to top the $3.2bn paid for Chelsea this spring, which at one point was the highest ever for a sports team .

That record was less than two weeks old when the Broncos trade was announced.

“You have companies like Waltons, but it’s a drop in the bucket,” Clark said. “It’s a club. It’s like, ‘When is the next Picasso going to sell? … The value sector has nothing to do with the economy. There’s always demand and there’s always a shortage of supply.”

Copyright © 2022 The Washington Times LLC.

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