Introduction
The financial landscape of United States professional sports is rapidly evolving. Soaring team valuations1, lucrative media rights deals2, growing portfolios of ancillary assets and expanding global fanbases have reshaped the economics of sports, creating new opportunities and challenges for team owners. This article examines the opportunities and challenges of public investment in U.S.-based professional sports franchises, with a focus on the strategic considerations for teams and leagues considering public markets.3
Liberty Media: Atlanta Braves
Liberty Media Corporation is a pioneer in public investment within U.S. professional sports. In 2016, the company introduced a tracking stock called Liberty Braves Group, allowing investors to gain financial exposure to the Atlanta Braves and associated operations. By structuring the instrument as a tracking stock, Liberty Media could support investments in infrastructure while preserving operational control over the team. These investments included Truist Park, the Braves’ home stadium, which opened in 2017, and The Battery Atlanta, a mixed-use development featuring retail, dining and entertainment spaces. This innovative approach made Liberty Media one of the first organizations to use tracking stocks in the sports sector, offering a model for other franchises considering public markets.
The strategy evolved further in 2023 with the spinout of the Braves and The Battery Atlanta into a standalone publicly traded company, Atlanta Braves Holdings, Inc. (BATRA). This move streamlined Liberty Media’s corporate structure and unlocked significant value for shareholders. It also introduced unprecedented transparency into the financial performance of both the team and associated real estate developments.
Since the spinout, ongoing investments in Truist Park have continued to enhance the fan experience, boosting attendance and sponsorship opportunities. An MLB fan survey recently ranked the Braves first in overall guest experience, concessions, and non-game entertainment. The Battery Atlanta has also become a cornerstone of the team’s business, generating $59 million in revenue in 2023, up from $15 million in 2017. Liberty Media’s approach to the Braves and The Battery Atlanta exemplifies how innovative financial strategies can foster growth, enhance transparency and unlock value across sports and entertainment ventures.4
Madison Square Garden Sports: Knicks and Rangers
Madison Square Garden Sports Corp. (MSGS) demonstrates another model for public sports franchise ownership. In 2020, the Madison Square Garden Company completed its separation of sports and entertainment operations. MSGS retained ownership of the New York Knicks, New York Rangers and other sports-related operations, such as ticket sales, sponsorships and media rights deals. Meanwhile, the entertainment and venue operations, including Madison Square Garden, Radio City Music Hall and the Beacon Theatre, were retained by the newly formed MSG Entertainment Corp.5
The strategic unbundling the sports and entertainment businesses attracted investors seeking more focused exposure. By enabling shareholders to evaluate each company’s assets independently, the move also addressed the “conglomerate discount,” which is a condition where a stock’s market value is less than the sum of its parts when valued independently. The MSGS case underscores how separating sports assets from unrelated operations can streamline valuation, attract focused investment and unlock greater shareholder value.
The Green Bay Packers: Community Ownership
The Green Bay Packers exemplify a distinctive ownership model rooted in community involvement. Unlike for-profit franchises, the Packers operate as a community-owned entity with over 538,000 shareholders who collectively hold more than 5.2 million shares. These shares cannot be traded, pay no dividends and have no market value, but shareholders receive voting rights and participate in governance.6
Over nearly a century, the Packers have utilized six stock sales, beginning in 1923 and most recently in 2022, to fund stadium renovations and facility improvements. Their most recent sale, completed in 2022, raised over $60 million to fund upgrades at Lambeau Field. The Packers’ model, while not profit-driven, illustrates the potential of public investment to align a team’s financial needs with community engagement and stability. For smaller-market teams, community ownership could offer a compelling alternative to traditional financing, especially for community-based assets like stadiums and arenas.7
Formula One: A Global Case Study
Though not U.S.-based, Formula One (F1) provides a global example of how public investment can fuel growth and innovation. After acquiring F1 in 2016 for $4.4 billion, Liberty Media listed F1 as a publicly traded entity on the NASDAQ under the Liberty Media Formula One Group (FWONA, FWONB and FWONK).
When F1 went public, the listing provided Liberty Media with a substantial capital infusion to significantly expand the sport’s global footprint. These funds were strategically deployed to invest in digital platforms, expand into new markets and attract younger audiences. The capital also supported the development of popular initiatives like the hit documentary “Formula 1: Drive to Survive,” which has dramatically boosted F1’s popularity worldwide. The F1 case study illustrates how public markets can provide the liquidity and strategic flexibility needed for global expansion and digital transformation, ultimately creating significant long-term value.8
Opportunities and Challenges: An Overview
Public markets offer unique advantages for sports teams and leagues compared to alternative financing mechanisms such as private equity, limited partnerships (LPs) or debt financing. Public investment can provide a lower cost of capital compared to private capital, which often seeks higher returns and can constrain long-term operational strategies. In addition, public markets may enable teams and leagues to attract international investors, who do not need to be approved by leagues as “owners,” and who are not subject to league ownership policies, thereby enhancing their global brand presence and diversifying their capital base. This could be especially significant for teams and leagues seeking to expand into international markets. Unlike private capital or other LP-style investments, public investment also offers greater flexibility in capital deployment, allowing owners to allocate funds with fewer externally imposed restrictions on the use of proceeds. Finally, public investment provides stable funding without the fixed payment obligations of traditional loans, offering greater flexibility during financial uncertainty, particularly in navigating economic downturns or interest rate fluctuations.
Despite these potential advantages, public investment is not without challenges. Regulatory compliance and public reporting requirements can be costly and time-consuming, potentially diverting resources from core operations and likely requiring additional administrative resources. Additionally, market volatility—driven by factors such as team performance or broader economic conditions—can complicate financial planning. Shareholder demands for transparency and short-term performance can conflict with long-term strategic goals, such as player development or infrastructure projects. Public investment in teams and leagues may introduce unpredictable external pressures that owners must carefully navigate.
Conclusion
Public investment represents a potentially transformative opportunity for sports teams and leagues, offering lower cost of capital, enhanced global visibility and strategic flexibility. However, the challenges and demands involved in accessing the public markets should not be underestimated, including heightened transparency demands, regulatory burdens and potential market volatility.
Sports teams and leagues are always seeking additional operating capital to fund market expansion, new media distribution strategies, efforts to grow their international footprint and improving and building new venues, among other strategic projects. For owners navigating rising costs, competitive pressures and the need for additional operating capital, public markets could provide a powerful tool to align financial needs and long-term objectives. By learning from examples like Liberty Media, MSGS and F1, teams and leagues can unlock significant value while carefully managing the trade-offs. Ultimately, the decision to pursue public investment should be weighed against the unique needs and goals of each organization.