History's largest sports deal also offers a market-beating return

A consortium led by private equity titan William Chisholm acquired the NBA's Boston Celtics in the largest deal in sports history with a price tag of $6.1 billion, plus potential earnouts. The acquisition of the most-decorated basketball franchise in the US provides a market-beating return to previous owner Wyc Grousbeck.

Grousbeck's family bought the Boston Celtics more than 23 years ago for $360 million. The $6.1 billion sale nets Grousbeck a total return of more than 1,600%, or a compounded annual growth rate (CAGR) of 13%. In comparison, the S&P 500 Index returned a CAGR of about 9.5% during the same period.

"The sale underscores the increasing financial allure of the NBA, particularly following the league's substantial broadcasting deal secured in 2024," said Michael Johnson, an analyst at S&P Global Market Intelligence Kagan. In the broadcasting deal, the NBA secured an 11-year partnership worth $76 billion with Walt Disney Co., Comcast Corp., and Amazon.com Inc. Valued at $6.9 billion annually, the 2024 deal reflects a 164.1% increase over the previous agreement.

Even among other sports deals, the Boston Celtics' return on investment is one of the best.

Before the Celtics deal, Josh Harris' purchase of the NFL's Washington Commanders held the record as the most expensive sports deal at $6.05 billion. The sellers netted a CAGR of about 9.1% since the previous Commanders transaction in 1999, which also beat the return of the S&P 500 Index.

Sports investing has taken off in recent years, becoming a veritable asset class with unique characteristics that has attracted a host of investors. The change was largely prompted by sports bodies becoming more lenient on the type of investors allowed to own sports franchises.

This has prompted private equity firms to invest in more sports teams and led to the emergence of specialized sports investors like Arctos Partners LP, Ares Management Corp. and 777 Partners LLC. As an asset class, sports has experienced steady growth in revenues from broadcasting rights and, more recently, streaming services.

The NBA's recent media rights dea is a good example of that trend: Disney and Comcast both operate broadcast and cable networks, along with associated streaming platforms. Amazon, meanwhile, operates the Prime Video streaming service. With the lucrative new deal, Johnson said each NBA franchise is projected to receive $142 million in media rights revenue next season, which will increase by 7% annually over the next decade.

Private equity firm Sixth Street Partners LLC is also expected to reportedly contribute over $1 billion to the Celtics deal.