💰 Buying Into The Big Leagues

THE MAIN EVENTBuying Into The Big Leagues ⚾

Sports investing is getting the Wall Street makeover.

New pooled funds are opening the door to investors who can't quite swing the $12.5 billion needed to buy the Lakers.

These funds bundle minority stakes in multiple teams, and some also invest in leagues, media rights, and entertainment companies. One starts at $25,000 for accredited investors.

The pitch is familiar: greater access, instant diversification, and a chance to own a piece of the teams we know and love.

Whenever a new investment gets "democratized," though, I have one creeping suspicion: Why are the insiders suddenly willing to share?

So, with a little help from my good 'ol friend Claude, I analyzed nearly 700 valuations across 124 NFL, NBA, MLB, and NHL franchises since 1960. Then I compared each owner's annual return with the S&P 500 over the same years.

The verdict: Sports teams have beaten the market, but not by enough to make every investment a slam dunk.

The NBA Is The Real MVP 🏀

Overall, sports teams returned 12.4% a year, compared with 10.9% for the S&P (with dividends reinvested).

• NBA: Beat the S&P by 2.9 percentage points a year

• NFL: Beat by 1.8 points

• NHL: Beat by 1.3 points

• MLB: Trailed by 0.1 points

NFL owners beat the market 84% of the time. Baseball owners did it exactly half the time, making an MLB franchise the world's most glamorous coin flip.

I also ran a cleaner 30-year comparison covering 1996 through 2025. During that stretch, the S&P returned 10.4% annually, turning $1 million into $19.2 million.

Here is what $1 million tracking franchise values would have become:

• NBA: $50.3 million

• NFL: $35.2 million

• NHL: $26.3 million

• MLB: $18.4 million

A Few Of My Favorite Findings 🔎

The league averages tell the big story, but a few results were too good to leave buried in the spreadsheet:

1. Only 3 of the 201 owners in the dataset lost money outright: CBS with the Yankees, an Expos ownership group, and Robert Johnson with the Charlotte Bobcats.

2. Owners who sold within 10 years beat the S&P 55% of the time. Those who held for at least 20 years did it 77% of the time.

3. Baseball's entire 1990s expansion class lost to the index. The Marlins, Rockies, Rays, and Diamondbacks all trail the S&P over their full histories.

4. The best long-term return belongs to the Warriors. Joe Lacob and Peter Guber paid $450 million in 2010 for a team Forbes now values at $13.5 billion. That is 30 times their money, or roughly 23% annually. Drafting Stephen Curry turns out to be a decent investment strategy.

Is There A Trophy Premium? 🏆

A small one.

Owners who won a championship beat the S&P 81% of the time, compared with 64% for everyone else. But within the same league, a title added only about 1.2 percentage points a year. Overall, the data is too small and noisy to count on.

Winning helps. But the league's business model matters much more.

Football, basketball, and hockey limit payroll costs and share enormous national TV deals. The NFL distributes more than $10 billion in national revenue each year, while the NBA's new media deal is worth roughly $76 billion over 11 years.

Meanwhile, baseball has no salary cap and depends on local media revenue. Its teams operate at margins of roughly 5%, compared with 20% in the capped leagues.

That model is looking risky too. Over the past four years, 13 of 30 MLB teams have lost their existing local television deals.

You're Not Missing As Much As You Think 🔒

Now, in fairness, these results probably understate the benefits of owning a team.

The numbers do not include:

• Cash the owners took out

• Tax write-offs on the purchase price

• Public money used to build stadiums

Forbes valuations for teams that have not sold recently are only estimates, too.

But let's be clear: Sports teams should outperform the S&P.

An index fund can be sold in seconds. A franchise cannot. Minority stakes are even harder to unload because buyers get little control and no easy exit. Investors deserve extra return for accepting that illiquidity.

The problem is that these new sports funds may charge away the advantage before it reaches you.

One fund charges roughly 3.5% to 4.1% annually for its $25,000 share classes. It plans to offer redemptions only twice a year, generally capped at 5% of the fund each time, and those redemptions are not guaranteed.

Its fees alone are more than double the typical owner's historical edge over the market.

Owning the Warriors at the beginning of the Curry era was an extraordinary investment. Paying several layers of fees for a small, illiquid slice of dozens of teams is a very different opportunity.

Sports franchises may be great assets. That does not automatically make sports funds great investments.

MARKET MOODMeta Spooked The AI Trade 👻

Winners

Hasbro

$HAS  ·  Cap $16.5B  ·  Week to date ▲ 18.7%
Magic: The Gathering topped $600 million in quarterly revenue for the first time, helping Hasbro crush profit forecasts and raise its outlook. The card game is now doing more than winning fans. It is carrying the business.

Blackstone

$BX  ·  Cap $141.9B  ·  Week to date ▲ 11.4%
Blackstone attracted $63 billion of new money, reassuring investors that private-credit fears have not scared off all clients. That was welcome proof of life for a stock that entered Thursday down 29% this year.

Lockheed Martin

$LMT  ·  Cap $136.1B  ·  Week to date ▲ 6.9%
Higher F-35 and missile production lifted sales 11%, while a $53 billion Patriot contract pushed Lockheed's backlog to a record $292 billion. Investors saw stronger business today and years of demand ahead.

Losers

Meta Platforms

$META  ·  Cap $1.65T  ·  Week to date ▼ 8.5%

Meta's ads are booming, but its AI buildout still left the company with a $2.1 billion quarterly cash shortfall. A new class of nonvoting shares gives Meta another way to fund that spending without weakening Zuckerberg's control.

General Motors

$GM  ·  Cap $65.6B  ·  Week to date ▼ 8.0%
GM beat profit forecasts, but it expects pricier copper, steel, shipping and memory chips to add $2 billion to this year's bill. If prices stay elevated, they could subtract another $1 billion to $1.5 billion from 2027 profit.

Netflix

$NFLX  ·  Cap $279.2B  ·  Week to date ▼ 4.9%

Netflix lowered its annual ad revenue forecast by $300 million, blaming delays in rolling out new ad tools. Plus, nearly 1,000 layoffs will add costs next quarter before the savings kick in.

FAST FACTSThe Cost Of Living, Itemized 🧾

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🛒 Walmart Bundles Walmart+ With Sam's Club: The combined membership costs $120 a year, $88 less than buying both. [Read]

💸 The IRS Is Mailing Surprise Refunds: Over 50,000 people with unused adoption tax credits are getting money back automatically. [Read]

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🎓 A Certificate Can Raise Your Pay: Full-time workers with a certificate, license, or certification earn 16% more than those without one. [Read]

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THE ODDSCan Apple Catch Nvidia? 🍎

CHART OF THE WEEKSupply Is Splitting The Housing Market 🏘️

After a year of recovery, the housing slump is back.

About 1 in 4 of America's 200 largest housing markets now have falling home prices, per ResiClub.

Nationwide, prices are up just 1.0%. But after 3.7% inflation, that means most homeowners' biggest investment actually lost value.

Of course, that national number blends very different markets.

Home prices in Hartford, Connecticut, sit 28.6% above their 2022 peak, while Austin's are 28.1% below theirs.

The difference is supply. Prices are still rising in parts of the Northeast and Midwest, where few homes are for sale. They're falling in pockets of Texas, Florida, Washington and Colorado, where listings now top pre-pandemic levels.

That's housing's catch-22. Scarcity protects owners' wealth, but keeps the next generation locked out.

WORDS TO REMEMBERSmall Change Keeps Getting Smaller 🧠