Have you ever wanted to be Mark Cuban, Jerry Jones or George Steinbrenner?
To have the ability to control how your favorite team spends money, makes trades, and handles on-the-field play is every sports fanatic's dream. After all, that's why fantasy sports are so popular, right? Everybody is clamoring for a little piece of the action on some level.
Of all the trophy assets one can own, a professional sports team is one of the most coveted, exclusive and elusive. Sports team acquisitions have garnered headlines over the past few years, with several recent team prices ranging in the billions of dollars. Since 2000, the top five U.S. team sales were at prices in excess of the billion dollar threshold, the highest being the $2 billion sale of the NBA’s Los Angeles Clippers in 2014 and the $2 billion sale of MLB’s Los Angeles Dodgers in 2011. In New York, the NFL’s Buffalo Bills were purchased in 2014 for $1.4 billion. Not long ago, sports franchises were run like small businesses, with any net profit generated being an additional, but not always expected, benefit. Today, given rising acquisition costs and the lucrative revenue opportunities teams offer, they are run as sophisticated enterprises with the purpose of yielding profit for their well-heeled investors. On the surface, the buying and selling of a professional sports team may seem like a regular M&A transaction. However, the many issues unique to the sports industry give these deals complicated twists that require extensive due diligence and the guidance of experienced counsel well-versed in a number of areas specific to the sports landscape. Potential team buyers and sellers need to be able to navigate the transaction process under the watchful eyes of respective leagues and governing bodies, while negotiating a plethora of business and legal issues.
Corporate Ownerhips and Affiliations
Several major companies have stakes in professional sports teams, or the companies have an affiliation with the owner. Buying shares in these companies won't get you box seats, free tickets or other perks:
- Miami Heat – The Heat's owner is Mickey Arison, CEO of Carnival Corporation, the world's largest cruise ship operator.
- Seattle Mariners – The Mariners' owner is Nintendo of America, one of the world's largest videogame manufacturers.
- Chicago Cubs – The Cubs are owned by a family trust established by TD Ameritrade founder Joe Ricketts.
- Toronto Blue Jays – The Jays' owner is the Rogers Blue Jays Baseball Partnership, a division of Rogers Communications.
- New York Knicks & New York Rangers – Both teams are owned by Madison Square Garden, Inc., a spin-off of Cablevision.
- Atlanta Braves – The Braves are owned by Liberty Capital Group, a division of Liberty Media Corporation.
- Philadelphia Flyers – The Flyers' owner is Comcast-Spectacor, a Philadelphia-based sports and entertainment firm.
Another well-known corporate owner was the Walt Disney Company, but it sold its stakes in the Anaheim Ducks and Los Angeles Angels.
Buying a team is a complex undertaking. There are many issues potential buyers need to be cognizant of when considering, preparing for, and executing such a transaction. The due diligence for a professional sports team M&A transaction involves in-depth investigation into a broad spectrum of important issues, directly and indirectly related to the team. In pursuing a team acquisition, the potential buyer must, in addition to engaging in extensive due diligence and negotiation, be ever mindful of complying with all applicable league rules and regulations.
Our Services :
- Supply and Demand
- League Guidelines
- The Stadium / Arena
- Expenses / Revenue
- Media Rights
- Ticket and Suite Sales
- Sponsorship Sales
- Concessions and Mercandise
- Closing the deal
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