Why do private equity firms take interest in

One of Los Angeles’ celebrated skilled sports activities franchises was owned by one local household for more than 45 years. Catering to Hollywood royalty and leaning into its “Showtime” attraction, the Lakers turned synonymous with the star-studded metropolis. Two fast transactions later, the workforce now belongs to a New York-based enterprise capital titan who made his billions in technology and software program.

Joshua Kushner, founder of enterprise capital firm Thrive Capital, and former Disney Chief Executive Bob Iger agreed to buy a majority stake in the Lakers last week. The Buss household’s grip on the NBA’s glamor franchise loosened in 2025 when they relinquished their majority share to Mark Walter. His companies are under federal investigation for undisclosed insurance coverage loans and Walter flipped the workforce after just 14 months.

In 1979, Jerry Buss purchased the Lakers, the Forum and the Los Angeles Kings for $67.5 million. Now the Lakers alone are price $12.5 billion.

“It used to be, ‘Hey, I’m in this for the love of the game,’” said Ross Williams, a private-equity attorney and associate at law firm Reed Smith. “Like I measure the success of my investment based on whether we win championships. … And now it’s becoming apparent that these are really, really good financial investments.”

The booming business of sports activities has attracted a flood of private-equity investment, and even the most notable franchises require the inflow of money to keep up in the arms race.

As of May, more than 74 North American skilled groups had some degree of private-equity involvement, according to the CFA Institute, an group offering finance schooling to investment professionals. Private-equity-backed consolidators have been accountable for 61% of all mergers and acquisition transactions in the sports activities industry since 2019, according to Oaklins, a global M&A and financial advisory company.

“The real attraction of professional sports is it seems somewhat recession-proof,” said James Adams, director of CFA program curriculum and an adjunct professor at New York University. “It has had a very successful run, a high rate of growth, it’s not as subject to the fluctuations of the business cycle as maybe other things are.”

For private equity — in which buyers buy into corporations that aren’t out there on the public market — sports activities presents protected harbor. Media offers present predictable income over a number of years. The NBA’s current deal that stretches to the 2035-36 season is price $6.9 billion per 12 months. Additional income streams with merchandise, sponsorships and ticket gross sales pile on. Owning an area, which the Lakers do not, opens the floodgates for live shows and occasions that add to the income.

“Sports is one of those rare instances where you can invest in something cool that also makes money,” Williams said.

The appeal of proudly owning a sports activities workforce is growing.

The NBA averaged at least 22 million followers during each of the last three seasons, according to Sports Business Journal. Last season’s nationally televised video games drew 170 million viewers, the most in 24 years and an 86% increase from the earlier 12 months. The NBA Finals between the New York Knicks and San Antonio Spurs had been the most-watched Finals since 1998. And the outlook for future income is strong, if followers’ appetites are any gauge.

The pattern is prevalent across many sports activities. WNBA viewership is at an all-time high. Fox and Telemundo dominated the summer time with their FIFA World Cup broadcasts. Of the top 100 TV broadcasts in 2025, 96 had been sports activities, according to Neilsen data, including 48 NFL video games and seven World Series video games (between the Dodgers and Toronto Blue Jays).

Investors are clamoring to discover the next enterprise that will hit it big with customers. Live sports activities already have a devoted market and more stability than other ventures always affected by technical developments.

“You read a lot about AI and there are a lot of companies that their fundamental existence is being questioned because of AI and what it can do,” Williams said. “We don’t want to watch robots play basketball.”

The NBA adopted its first private-equity possession framework in 2021. Individual firms can own up to 20% of an NBA workforce, according to Sports Business Journal, and 30% of a single workforce might be owned by private-equity firms. Such firms had been restricted to 5 groups in 2021, but the quantity grew to eight in 2025.

Private equity even infiltrated the most exclusive possession membership in 2024 when the NFL was the last major U.S. league to open its doorways. The league allowed preapproved firms to own up to 10% of a single workforce, up to six groups whole with each stake being at least 3%.

The permanence of sports activities franchises had been behind the formation of Kushner’s Thrive Eternal enterprise, a everlasting holding company launched under Thrive Capital in April. Although venture-capital firms typically focus on turning income from the most early stage corporations, Thrive Eternal is “concentrated in a small number of assets that we can own and steward over many decades,” the company’s web site says.

“These are assets with qualities that cannot be replicated by technology,” the homepage reads. “Iconic franchises and cultural institutions rooted in tradition, identity, and shared experience.”

How Kushner and Iger plan to finance the acquisition of the Lakers has yet to be decided. Kushner, already a minority proprietor in the Miami Heat, must first divest from that workforce before the Lakers sale might be finalized, and the transaction must be permitted by the NBA board of governors.

The board of governors announced last 12 months that Jeanie Buss would stay in charge of the Lakers’ selections after the Buss household’s sale to Walter. The household’s future is in limbo as Jeanie Buss contests her 5 siblings’ plans to promote their remaining stake of the workforce. The household feud over their remaining 17.8% stake shouldn’t be anticipated to affect the sale from Walter to Iger and Kushner, a source acquainted with the state of affairs but not licensed to converse publicly told The Times, although it may have an effect on who would signify the workforce on the board of governors going ahead.

While analyzing the sale transaction, the board may look at where the money is coming from, Williams said: how a lot money from Kushner and Iger personally, how they’re transferring belongings to present the billions of {dollars}, and how a lot potential private-equity money from Thrive.

Thrive Enternal’s first entry into sports activities was buying a noncontrolling stake in the San Francisco Giants. Four months later, it’s set to add the Lakers.

Private-equity firms can have a sliver of a workforce, but should not to have a controlling voice. Their affect trickles down to followers in other methods. Deep-pocketed new house owners can help construct stadiums or improve current venues to maximize income from luxurious suites. Ownership selections also can lead to signing or retaining star gamers as groups hope to contend for championships. The inflow of money into sports activities has helped girls’s sports activities take off with unprecedented investment and growth.

But just as a workforce’s valuation goes up, so has the price tags for followers. Just getting in the door to Dodger Stadium can price a household of 4 practically $250. In one season under Walter, season-ticket price will increase rankled Lakers followers. A second row of courtside seats during the Lakers postseason modified what used to be an exclusive really feel to a sport.

Yet at each sport, the seats had been full.

Lakers star LeBron James hugs governor Jeanie Buss after profitable the NBA championship on Oct. 11, 2020, in Lake Buena Vista, Fla.

(Douglas P. DeFelice / Getty Images)

“Passionate sports fans are not as price sensitive,” said Arianna Uhalde, an affiliate professor of medical advertising at USC’s Marshall School of Business. “I think not as sensitive to some of these decisions that are getting made by ownership. It doesn’t mean that fans are not going to get upset, but they love their teams. They’re likely to still show up in good times and in bad.”

The business of sports activities has been great for house owners, but isn’t assured to last. A change in state or federal administrations and insurance policies may have an effect on tax legal guidelines that are advantageous for workforce possession, said Mark Conrad, a director of the sports activities business focus and professor of law and ethics at Fordham University’s Gabelli School of Business. Labor points such as the one threatening Major League Baseball may put a freeze on valuations. A recession or another global pandemic may tank the financial system. Even the NBA Finals scores during the COVID-19 pandemic had been at an all-time low, averaging just 7.45 million viewers for the Lakers’ six-game, bubble collection win over the Miami Heat.

Fans have steadily marched back ever since.

“They’re going to pay for it,” Conrad said. “They can. They do. … And if that’s the case, the lords of the sport are going to be mighty happy.”