The National Basketball Association (“NBA”) Board of Governors has voted to permit sovereign wealth funds, pension funds and university endowments to invest in NBA teams. Major U.S. sports leagues have traditionally limited who they permit as owners of their franchises, not just for controlling general partners, but for limited partners as well, even though limited partners are traditionally passive owners with no governing rights. However, two years ago the NBA became the first major U.S. sports league to permit private equity investors, and now the league is broadening the scope of potential investors as franchise valuations continue to skyrocket. There are only so many Americans with pockets deep enough to afford franchises that are being sold for several billion dollars, and so the NBA has realized that it needs to expand the pool of possible buyers. Continue reading “NBA to Permit Sovereign Wealth Fund Investors in Franchises as Valuations Soar”
FTX’s Collapse Should Remind Sports Teams to Be Careful When Choosing Their Sponsorship Partners
The dramatic collapse last week of the cryptocurrency exchange FTX will also affect those teams, arenas and other sports companies that have naming rights and sponsorship agreements with FTX.
When a sponsorship partner undergoes a dramatic collapse like that suffered by FTX last week, sports teams that have partnered with the company for naming rights and other sponsorship agreements suffer losses on multiple fronts. First, of course, is the loss of the contractually guaranteed income that the team has taken for granted when budgeting for years to come. But beyond that is the reputational harm. Sports is about winning and losing, and no team wants to be associated with a loser. Continue reading “FTX’s Collapse Should Remind Sports Teams to Be Careful When Choosing Their Sponsorship Partners”