The Sports Law Playbook: Private Equity Takes the Field

Welcome back to The Sports Law Playbook from Loeb & Loeb. Private equity has bought a seat at the owners' table, and in this issue we look at how teams can keep investor returns and long-term franchise interests on the same side, through smart conflict safeguards, independent approval of affiliate deals and other governance plays.

But first, a pregame rundown of the latest legal plays in sports:

• Federal NIL legislation. The Senate approved an amended version of the Protect College Sports Act (S. 4668) on September 28, 2026, by a 77-22 margin. No college sports bill this broad had previously cleared either house of Congress. The bill would shield certain NCAA rules on athlete pay, transfers and eligibility from antitrust challenge. It would also add federal oversight of NIL deals and athlete agents. It leaves open the question of whether college athletes are employees. The House will not take up the bill until after the midterm elections. Until then, schools have no new federal requirements to meet. 

• House settlement implementation. In the first year of the House settlement, schools distributed more than $1.77 billion directly to athletes, according to the NCAA and the College Sports Commission. For the 2026-27 academic year, each school may share up to roughly $21.58 million. Lawsuits are still being filed. Plaintiffs are contesting how the pay cap is applied, how the College Sports Commission reviews NIL deals and the NCAA's new age-based eligibility standard. 
• Prediction markets and sports event contracts. In September, the Sixth Circuit ruled that Ohio and Tennessee may apply their gambling laws to Kalshi's sports-event contracts. On October 9, the Commodity Futures Trading Commission (CFTC) proposed a rule that would bring sports and other event contracts within its definition of swaps, placing them under federal oversight. New Jersey has asked the Supreme Court to resolve the issue, with support from the NFL and 39 states.
• Sports betting and federal regulation. On the same day as its proposal, the CFTC issued an interim final rule confirming that state- or tribally licensed casino-style gambling products, including sportsbook wagers and casino games, are not swaps. The rule took effect on October 19. Taken together, the two actions draw a line between traditional sports betting, which stays under state and tribal regulation, and event contracts traded on federally regulated exchanges.

From Fan Base to Asset Class: Balancing Private Equity Returns with the Long-Term Interests of Sports Franchises

By Ronelle Porter and Evan Saunders

Governance, fiduciary duties, financial risk and stakeholder interests in an increasingly institutionalized sports industry

In 2021, Arctos Sports Partners acquired a 13% ownership stake in the Golden State Warriors at a $5.5 billion valuation and a 17% stake in the Sacramento Kings at a $1.7 billion valuation (see Sportico article here and Front Office Sports article here). Since 2024, private equity has invested more than $400 million in women’s sports, including the National Women’s Soccer League (NWSL) (Private Capital in Sports: PE Is Up to Bat, 2024). Earlier this year, Apollo Sports Capital made a $2.6 billion investment in the New York Yankees (see The Athletic article here). Team valuations are rising rapidly, as is the frequency of team sales and financing events, driven in part by the arrival of a new class of bidder: private equity.

League rules are evolving alongside these deals, pushing valuations higher and expanding ownership opportunities for institutional investors. Major League Baseball (MLB) raised its single-firm private equity limit to 20% this summer, matching the National Basketball Association (NBA) (see Front Office Sports article here). The National Football League (NFL) maintains a 10% cap, while the NWSL goes further and allows funds to take majority control of a club (see The Athletic article here). By one estimate, institutional investors now hold stakes in 74 North American teams (see CFA Institute report here), a trend closely tied to soaring franchise values, with NFL teams now averaging $7.1 billion. The question is no longer whether institutional capital belongs in sports, but whether governance frameworks are keeping pace.

At its core, private equity’s mission is to deploy a closed pool of committed capital to generate returns for its investors, typically over a relatively short holding period, through active ownership, strategic growth, operational efficiency and cost discipline, and leverage. That model can benefit leagues and legacy family owners. As valuations climb, traditional individual ownership becomes harder to transition, positioning private equity firms and private credit providers as vital sources of liquidity and of funding for facilities and operations. Sports also offer the kind of predictable, high-margin revenue that institutional investors seek, driven by long-term media rights packages, such as the NBA’s multi-billion dollar contracts, and the scarcity of live content. Even in difficult economic times, demand for sports has proven remarkably durable.

It is therefore no surprise that sports franchises are increasingly treated as one asset within a broader ecosystem of teams, venues, media, real estate and hospitality businesses. Deloitte’s 2026 sports investment outlook expects ownership groups to pursue sponsorships and commercial deals spanning every team in their portfolios (see Deloitte report here), which will likely lead to cross-portfolio sponsorship, venue, media and services agreements among affiliates of private equity funds. Although private equity may hold only limited, non-controlling interests in MLB, NBA and NFL teams, controlling owners may still have incentives to approve affiliate transactions that benefit their private equity co-owners. Those arrangements warrant a structured governance mechanism that balances the interests of all of a team’s stakeholders and protects the franchise’s long-term interests.

What should an appropriate governance structure look like? Many of the building blocks already exist. League private equity policies generally require league vetting and approval of institutional investors, limit funds to passive, non-controlling positions with restricted governance and information rights, and impose conditions on funds that hold interests in multiple teams within the same league. On the fund side, limited partnership agreements and sponsor conflicts policies typically require disclosure of affiliate transactions and, in many cases, review or consent by a limited partner advisory committee. The challenge is less about inventing new safeguards than about applying and adapting these existing tools at the team level, so that conflict-of-interest policies, required disclosures, independent approval processes, arm's-length pricing and clear revenue-allocation methodologies operate together with league information-sharing restrictions.

Then there is the tension between capital allocation and team owners’ obligations. Owners are expected to compete to win a championship. However, the infusion of private equity capital, and the commercial opportunities that come with it, could incentivize owners to prioritize those opportunities, even where they conflict with the owners’ duties to the league, the team and its fans. Investors may prioritize valuation growth, distributions, cost cutting or a timely exit over winning a championship. Stakeholders worry that this tension could lead a team owner to pursue short-term financial goals through higher prices (for tickets, concessions and merchandise, or by expanding luxury suites at the expense of general admission seating) or reduced operating costs (such as player payroll or staff).

These concerns are unlikely to disappear, and team owners and private equity funds will need to stay mindful of how they can affect each party’s short-term and long-term viability and success, both financially and on the field. Some protections already operate in this space, including league ownership and approval requirements and the conflicts provisions found in fund governing documents, but they are not always calibrated to the team-level transactions described above. Legal counsel can help address and mitigate these concerns by building on those existing frameworks: drafting and adopting related-party approval policies with affiliate transaction protections, such as advance disclosure, approval by disinterested owners or an independent committee, market-based pricing supported by third-party benchmarking where appropriate and periodic review of ongoing arrangements; conducting diligence to confirm compliance with league ownership limits and assess teams’ long-term capital needs; negotiating balanced investor agreements; implementing information barriers for multi-team holdings; and documenting how boards weigh financial and competitive objectives.

Private equity returns and a franchise’s long-term interests are not mutually exclusive. Sound governance allows investors, owners and the communities they serve to share in the value that great teams create.