There are several multi-team conglomerates, but they’re still more the exception than the rule. Expect that to change quickly. 

The headline on the Lakers' sale was the $10 billion price tag. But it’s also worth noting the sale is set up to go to Mark Walter, who is also the majority owner of the LA Dodgers. This marks the continuing evolution of what we could call Ownership v3.2. Here’s the short history:

Ownership 1.0 - Civic Leaders

Local business leaders and/or prominent families owned sports franchises in much the same way they supported museums and opera houses. Teams were run less for business motives than as a symbol of local standing.

Ownership 2.0 - Status Symbol

As professional sports became more prominent and profitable, they became less symbols of civic pride than of professional accomplishment. Owning a team showed you were big time. Some billionaires bought yachts, others bought sports teams. Making money was great, but it was a side hustle with benefits.

Ownership 3.0 - Consortium

As valuations accelerated, the local sports team went from a local institution to an asset class. Investment groups came in to take advantage of reliable and growing revenue streams.

Ownership 3.2 is the evolution of the Consortium stage to include Multi-Club Ownership (MCO). It is a logical extension of the same economic forces. A sampling of the US-based examples includes:

Based on an analysis of publicly available data, there are at least 16 multi-team ownership groups controlling a minimum of 36 major professional sports teams in the United States and Canada. There are even more multi-team owners outside North America with interests in multiple soccer teams across the world. While there are still 1.0 owners like the Halas family clinging on in Chicago, there are several factors that will make multi-team ownership the preferred model going forward.

The RossArctos Sports Franchise Index (RASFI) analysis of the largest North American leagues shows that, over the past three years, sports teams have earned over double the return of US or global equities with less volatility. That has drawn investors, but the escalation in media rights fees that has driven that growth is not likely to continue at a similar pace. This will lead owners to seek gains in other areas, which will help drive the multi-team model from both a revenue and cost perspective.

As teams have gotten more advanced, they’ve had to invest in more infrastructure than just a stadium and a ticket office. Having multiple teams allows MCOs to spread these costs over a greater number of assets, such as:

Tech Stack: Teams need a sophisticated ticketing system, a Customer Relationship Management (CRM) system, a Content Management System (CMS), and other tech applications required to manage modern teams. Being able to apply those systems across multiple teams lowers the per-team cost of that tech deployment. 

Management and Administration: The growing sophistication and fragmentation of marketing has led to larger teams to handle the higher complexity. Yet there is a cadence to that that necessitates this staff going from being fully utilized to underutilized in the course of a typical season. Applied across multiple teams and varying seasons, these resources can be applied more consistently and efficiently across multiple teams. The same applies to many other functions within a team.

In general, multi-team models increase efficiencies that lower operating costs for each individual team.

MCOs also open up more revenue opportunities for ownership. 

Sponsors - As teams compete for sponsorship fees, a multi-team offering provides a greater canvas from which to create potential deals. They can provide a one-stop shop for sponsors looking to tap into multiple sports fan audiences. It also provides more opportunities to nurture and maximize successful sponsor partnerships by being able to sustain a higher number of sponsor relationships over multiple properties.

Fan Scale and Data - Multiple teams also give owners a larger database of fans to leverage. Whether it’s to drive sponsorship activations or to increase team revenues, having a larger record of fans for whom you have geographic, demographic, and other information provides more cross-selling opportunities.

There are some multi-team ownership groups, like MSE, that are focused on a particular region of the country. This opens up further opportunities around critical factors like real estate. Mixed-use developments centered around sports facilities like Battery Park in Atlanta are an increasingly appealing model surrounding new stadium construction. Having multiple sports facilities or shared facilities in the same development increases the year-round foot traffic and further boosts the revenue potential of this approach. 

Also, as MCOs seek limited partners or other investors, they offer a more diversified revenue stream than a single team. Revenues and profits become less subject to the ups and downs of any one team. So, MCOs may enjoy a funding advantage as well. 

Combining all these factors suggests that, absent regulations from the leagues involved, the MCO model will inevitably become the structure of choice.