Professional Sports: The Next Big Play in Dealmaking

In the past few years, the world of professional sports has seen unprecedented interest from investors. Our London office recently wrote about how outside investment has been increasingly welcomed by major sports leagues, noting that CVC Capital Partners’ acquisition of a majority stake in the Formula 1 franchise in 2006 kickstarted the play for private equity to invest in professional sports. Our London office also recently discussed the decision of National Football League (“NFL”) owners to allow private equity to acquire ownership stakes in individual franchises, which has broken with the longstanding tradition of the league having some of the strictest ownership requirements that have historically shunned institutional investment. On December 11, 2024, Law360 reported that the Buffalo Bills and Miami Dolphins became the first NFL teams to sell minority ownership shares to private equity firms.

Bloomberg-compiled data shows that dealmaking activity in professional sports has been on an upswing, with activity reaching a total value of US$25 billion in 2023, with 63 teams in four major North American sports leagues having private equity connections, valued at a combined nearly US$150 billion. As reported by PitchBook, while National Basketball Association (NBA) teams and Major League Baseball (MLB) teams are the top private equity targets, investors are branching out as notable sports deals last year included Arctos Partners acquiring a minority stake in the French soccer club Paris St-Germain—which valued the club at US$4.3 billion—and Ares Management acquiring a minority stake in the English soccer club Chelsea FC for US$500 million. The recently announced CA$4.7 billion acquisition of BCE Inc.’s ownership stake in the Maple Leaf Sports and Entertainment franchise by Rogers Communications continues this trend, with the deal having potential to be one of Canada’s largest transactions for 2025.

Investment in professional sports has entered the global arena

Although the United States is often considered the centre of professional sports, investor interest in sports-focused assets has spread globally. For example, our Milan office recently formed a sports law practice group that will provide strategic advice to professional athletes and sports clubs on corporate, regulatory and employment law issues to meet the growing needs of the European sports industry as European franchises continue to become increasingly popular with overseas fans and investors alike. According to PitchBook, three of the five most prominent private equity sports deals last year involved Europe’s top soccer leagues.

Canada has been another destination for sports-focused dealmaking, with our Calgary office recently advising the Calgary Sports and Entertainment Corporation (“CSEC”), the owners of the Calgary Flames National Hockey League franchise, on its development of a new CA$800 million arena in downtown Calgary. The Calgary Flames will play in the arena, as will other sports franchises owned by CSEC, and will be a centrepiece of the Calgary entertainment district. This investment is emblematic of the ongoing interest and growth in the Canadian sports industry.

Esports are joining the big leagues of sports-focused investment

Investors have also turned to the growing esports market as a niche investment opportunity, alongside their increasing interest in professional sports, with private equity funds spending a total of US$5.4 billion on gaming deals in 2023, the highest deal value since 2016, as reported by PitchBook. BCG-compiled data shows that the gaming market was a roughly US$184.4 billion industry in 2022, with continued growth expected as advances in technology and gaming development continues to draw new players. In its report, BCG notes that M&A activity in this space is also expected to rise as legacy players seek to consolidate the market and acquire intellectual property.

We have been at the forefront of activity in this area, having advised on a number of transactions and esports-related matters, including Modern Times Group MTG AB on the sale of ESL Gaming (“ESL”) (one of the world’s largest independent esports companies) to the Savvy Gaming Group for US$1.05 billion. We have also been involved in the formation of Enthusiast Gaming Holdings Inc. (“Enthusiast Gaming”), a publicly listed esports franchise in North America which holds a number of esports-related assets, including seven esports teams. In addition to the formation of Enthusiast Gaming, our Toronto, Vancouver and Dallas offices recently advised Enthusiast Gaming on a US$20 million term loan that will enable Enthusiast Gaming to continue its long-term vision for the esports industry. ESL and Enthusiast Gaming are two of many examples of how esports is joining the world of sports-focused dealmaking.

Want more information?

For more information on sports law and gaming, please visit:

• Sports Law
• Gaming
• State of Play

The authors would like to thank Patrick Lajoie for his significant contribution to this article.