Just In: The NBA (National Basketball Association)has decided to enroll Sovereign Pension, Endowments, and Wealth Funds in their passive stakes teams, welcoming investors who manage assets that by value estimates around $30tn.
The governing body of the NBA has approved the proposal for such investments through voting. However, the buyers would still be under league review and passed after board approval. The prime objective behind this entire plan is to enhance the NBA’s push to attract more institutional investors to get involved in team ownership, says NBA Boss Mike Base.
Notably, NBA has permitted various private equity firms to purchase stakes in recent years, including selling up a deal in 2022 for Blue Owl Capital’s Dyal HomeCourt Fund to be able to take over minority interests in various franchises. It has now been shared with Atlanta Hawks, Phoenix Suns, and Sacramento Kings.
According to Data for Global SWF, the Sovereign Wealth Funds hold around $10.5tn as of the end of 2021, a historic high, while public pension funds had $21.4tn. Perhaps the addition of passive investments from significant funds will increase the number of potential future club owners even more.
It is important to note that the National Basketball Association’s rising financial standing makes it very difficult for owners to retain their ownership, with the average cost of an event’s team reaching up to $2.5 billion.
