Clip of the Lakers

Historically reserved for members of the 3 comma club (billionaires), owning an NBA team is becoming less of an impossibility and more of a pipe dream. Commissioner Adam Silver announced that up to 30% of a team’s equity was open to ownership by private equity investment funds.

NBA franchises are booming. As made clear by Joe Pompilano, in 2010 the average franchise was worth US$370m. Last year the average rose to US$2.4b- almost a sixfold increase. He furthers points out that the American sports franchises have grown at 12% annually in the last 3 decades. With high returns, diversification and also the fun factor, it’s obvious why investors may be seeking a stake.

So how can the everyday investor get a piece of the Lakers? Barring the fact such deals are probably oversubscribed the instant they open, and nationality issues, private equity deals are usually reserved for “accredited investors”. The good news is that the SEC loosened the definition of an accredited investor late in 2020. While the label was awarded purely on a net worth and income basis, the SEC now recognised individual investors who have gained their series 7, 65 and 82 certificates. Ok so the barriers haven’t been lowered that much.

Either way, the dream is still possible. Let us know if you succeed.