Investing in multiple teams versus one is a smart strategy for bundling assets that have historically increased in value but aren’t tied to the economy or stock market.

The lust for sports empires is increasing. A group led by Josh Harris is close to buying the NFL’s Washington Commanders for $6 billion. Harris, via Harris Blitzer Sports & Entertainment, is already a managing partner of the NBA’s Philadelphia 76ers and NHL’s New Jersey Devils. Outside of HBSE, Harris is also a general partner of the English soccer team Crystal Palace. In January Forbes pegged HBSE as the world’s 18th most valuable sports empire, worth $4.65 billion. All told, once the deal to buy the Commnders closes, Harris will effectively run a sports empire worth around $10 billion.

The attraction of an empire is that the whole is worth much more than the sum of the parts. Ted Leonis, who runs Monumental Sports & Entertainment, which owns Washington’s Wizards (NBA) and Capitals (NHL) explained in the video below how empires can derive scale from their sports assets that should afford them valuations akin to technology companis with valuable intellectual property.

It’s little wonder investors want in on the action. During the past week, Sportico reported that Maple Leaf Sports & Entertainment chairman Larry Tanenbaum is close to selling a share of his MLSE holdings, which owns Toronto’s Raptors (NBA) and Maple Leafs NHL) to a pension plan for Ontario public employees at an enterprise value of more than $8 billion, and that the Qatar Investment Authority is buying a piece of Leonsis’ MSE at a $4.05 billion valuation.

And just yesterday Bloomberg reported the RedBird Capital, which owns the Italian soccer team AC Milan and a piece of the English Premier
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 League team Liverpool and the Boston Red Sox via its investment in Fenway Sports Group, is in talks to invest in the Renault-owned F1 team Alpine. RedBird’s sports empire, the 20th most valuable in the world, is already worth close to $4 billion.

The lesson is pretty clear—if you have the capital, investing in sports empire, as opposed to a single team, is a smart way to bundle assets that have historically increased in value but that are not tied to the fortunes of the economy or stock market like typical businesses. Recall that in 2009 as the great recession was coming to an end, the Ricketts family paid a record $700 million for the Chicago Cubs and Wrigley Field, plus another $145 million for Tribune’s 25% stake in Comcast SportsNet Chicago. Those moves handed the Chicago media giant a thirteenfold increase in real terms on the investment it made two decades earlier—a year after the S&P 500 fell 37%.

As sports leagues continue to relax their rules regarding institutional and sovereign ownership the rise of the sports empire will only escalate.

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