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2025-05-19
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Over the past six years, the five major North American sports leagues (MLB, NBA, MLS, NHL, and NFL) have revised franchise ownership rules to permit institutional investment. These changes have opened the door for private equity participation in sports franchises, aligning teams' growing need for capital and liquidity with investors' search for risk-adjusted returns in a relatively untapped market. This thesis explores private equity's role in North American sports franchise ownership, explicitly focusing on Major League Baseball. Using quantitative and qualitative methods, the study compares private equity-backed teams to traditionally owned franchises across metrics such as enterprise value growth, operating income, and strategic innovation. The findings suggest that PE-backed teams outperform their peers financially; however, the precise valuation impact of PE involvement remains ambiguous. Additionally, the research highlights how private equity contributes to value creation through operational improvements, real estate initiatives, media modernization, and scalable market strategies. These insights offer meaningful implications for league officials, team owners, and investors navigating the evolving relationship between institutional capital and professional sports.
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Finance