(Photo by Cheriss May/NurPhoto via Getty Images
NurPhoto via Getty Images
In recent years, all of the major North American sports leagues have changed their ownership rules to permit specialist private equity funds to buy non-controlling stakes in their clubs under strict rules. The change in rules reflected the fact that sports teams had generally become too expensive for private individuals to buy, as had been the leagues’ historical approach. As franchise valuations have grown far faster than player salary caps and wages, some players – including Steph Curry – have called for permitting players to receive equity interests in the clubs for which they play. Whether that is a realistic goal is unclear.
Valuation Explosion
According to Forbes, NFL clubs are worth an average of $7.1 billion each, a 25% increase from 2024. The other major American leagues are also of substantial and growing value – NBA clubs are worth $4.4 billion on average, NHL clubs $3.8 billion, and MLB clubs $2.6 billion. Indeed, the valuations for NFL, NBA, and NHL clubs have more than doubled over the last five years.
The rise in franchise values can generally be attributed to simple supply and demand. There is generally a very fixed supply of professional sports teams and only a handful are actively on the market at any given time. Moreover, sports teams are the ultimate vanity asset – something billionaires love to own without too much concern about possible operating losses (which likely just offset taxable gains elsewhere).
The byproduct of the ever-increasing team valuations is that it had become too difficult to find a small number of individuals with sufficient capital to buy and operate a team (and its related assets, such as a stadium). Consequently, in recent years, all of the major American professional sports leagues have amended their ownership rules to permit investment by private equity firms. The rules governing these investments are strict, including requiring long-term investment, limiting the number of teams in which firms can invest, and limiting the control that can be exercised by the firms.
Several firms and clubs have taken advantage of the changes. Arctos has taken shares in the Buffalo Bills, Boston Red Sox, Houston Astros, Los Angeles Dodgers, San Diego Padres, San Francisco Giants, Golden State Warriors, Sacramento Kings, Utah Jazz, Minnesota Wild, New Jersey Devils, Tampa Bay Lightning, and Utah Hockey Club, among other sports assets. Blue Owl Capital Corporation’s Dyal HomeCourt Partners fund bought stakes in the Atlanta Hawks and Phoenix Suns and the Miami Dolphins also recently sold a small stake to Ares Management.
The Players’ Share?
The rapidly rising franchise values have caused some players to consider whether they are getting their fair share of the business which relies in large part on their labor. Most notably, in the summer of 2025, Warriors guard Steph Curry argued that players are underpaid since they are not permitted to share in the upside that comes with an equity interest in the club.
Instead, the players in the NFL, NBA, and NHL have generally fought over the last several decades for the right to receive a guaranteed portion of the revenue received by the leagues and their clubs (generally around 50%) in exchange for a salary cap (MLB remains the one league without a salary cap, though it does have a luxury tax system which penalizes clubs whose payrolls exceed certain thresholds). For context, the NFL salary cap for 2025 is $279.2 million while the NHL’s is set to be $95.5 million this upcoming season.
While these amounts are substantial, they pale in comparison to the team valuations. Seemingly for these reasons, the Women’s National Basketball Players Association (WNBPA) had said it wanted an “equity-based” model in advance of ongoing labor negotiations with the WNBA. What the union meant is not entirely clear, but it likely reflects the fact that the players do not feel they are receiving a fair share of the growth in the league’s value, even if teams lose money on paper.
Curry’s comments are particularly notable given the relatively strong working relationship between the NBA and the National Basketball Players Association (NBPA). Curry emphasized the intended partnership between club owners and players, which was reflected in changes to the parties’ 2023 collective bargaining agreement (CBA). That CBA permits players to own up to 1% of the publicly-traded shares of a company that directly or indirectly owns an NBA team (no NBA teams are currently owned by publicly-traded entities). The CBA also permitted the NBPA to have a passive investment in the private equity funds that invest in NBA teams. And finally, the league and players agreed to form an Investment Committee to consider additional investment opportunities by players, including in businesses affiliated with NBA teams.
There is some precedent for players’ desire to own a part of the teams for which they play. The Players’ League was a player-created and partially-owned baseball league that formed and played in 1890 after disputes with other leagues. It folded after one season amid a rapidly evolving landscape of professional baseball. In 1999, hockey star Mario Lemieux bought the Pittsburgh Penguins out of bankruptcy after the club owed him $32.5 million in deferred salary. Lemieux returned to the ice the next season and was a player/owner of the club until his second retirement in 2006. In 1998, the Denver Broncos offered John Elway the opportunity to buy 10% of the team for $15 million and another 10% by foregoing $21 million in deferred salary. The NFL reportedly approved of the deal but Elway turned it down. Finally, most recently, Unrivaled, the 3-on-3 women’s basketball league, has provided some if its players with equity.
Then, of course, it is common in many industries for companies to offer stock or stock options to their employees in an effort to retain talent and align incentives.
Could It Work?
One of the principal concerns over providing players with ownership interest is how such equity is accounted for salary cap purposes. The leagues believe that salary caps and luxury tax systems are important cost control mechanisms that help level the financial playing field among clubs, thereby promoting competitive balance and fan interest. Providing players with equity might distort that system.
Consider a hypothetical example. Paolo Banchero of the Orlando Magic is scheduled to be a restricted free agent after the 2025-26 season. Prior to the 2024 season, Forbes estimated the Magic to be worth $3.2 billion. Under the NBA-NBPA CBA, Banchero could likely sign a maximum five-year deal with a salary equal to 25% of the salary cap, worth approximately $40 million annually. While Banchero’s contract would meet one of the exceptions to the NBA’s salary cap, it still must be accounted for and does count against the club’s luxury tax thresholds.
But what if instead of paying Banchero $40 million per year, they paid him $30 million per year and gave him 1% of the team? As an initial (and accounting) matter, the 1% interest would need to be valued, which is not easy. Sports franchises are typically only valued at the time of a sale of some or all of its shares. On paper, that 1% interest might be worth $32 million (according to Forbes’ estimates), but its actual value could depend on several factors, such as what benefits and rights are provided, what the limits on resale are, and the market for the stake in the event Banchero wanted to sell.
If Banchero’s interest were valued at $32 million, should it count against the salary cap for just the 2026-27 season? Or should it be prorated across the life of a contract like a signing bonus in the NFL? Would it be taxed?
It then gets even more complicated the following year. Annual valuations of a franchise’s value purely for salary cap purposes would be an uncertain, tedious, and costly exercise. Choosing the valuator too would be complicated, since players and teams may have competing interests in the valuation. Indeed, teams themselves would be conflicted – they would want the valuation to be low for salary cap purposes but also high in the event of a possible sale. And then what happens if a player gets traded to another team?
Perhaps most importantly, few (if any) franchises are limited to the teams employing the players. Sports franchises are increasingly conglomerate in nature and often include multiple sports teams, a stadium or arena, ancillary property development, sports adjacent businesses, and more. The differences in these holdings can help explain some of the large discrepancies in franchise valuations. It would seem odd to provide a basketball player with an equity interest in an entity where the basketball team is only a partial holding in the entity’s portfolio. Nevertheless, theoretically a franchise could do it if they thought it worthwhile.
For player equity to work, there would have to be a fair and efficient process for valuing the club. The NBA-NBPA CBA painstakingly identifies the revenue streams considered Basketball-Related Income, from which the salary cap is derived. Perhaps there is a multiple of that number that is a reliable predictor of a club’s value when compared against past transactions for minority stakes in NBA clubs. Indeed, Sportico estimates that NBA teams are valued at an average of 11.9 times their annual revenue. From there, a player’s equity interest could be treated the same as salary or a signing bonus for salary cap purposes.
There are lots of questions around the possibility of players owning equity in the professional sports teams. At present, there are few answers. Yet leagues and players have a long history of hashing out how to fairly divide the spoils of their joint efforts, sometimes more amicably than others. Time will tell whether equity ownership is an issue over which players are prepared to take a stand.
None of the NFL, NBA, NBPA, Arctos or Blue Owl Capital Corporation responded to a request for comment.