Private Markets Go Courtside: Investing in Sports & Media

April 2026

Introduction

Over the past few years, one of the more interesting shifts in private markets has been the growing push into sports franchises, media rights, and related entertainment assets. What used to be a niche, institutionally dominated space (think sovereign wealth funds and a handful of ultra-high-net-worth families) has started to make its way into portfolios of RIAs and their clients.

If you have been in enough client meetings or industry conversations lately, you’ve probably felt it too. Everyone has either been pitched a sports or media fund, is currently invested in one, or is at least asking questions about the space. The narrative is compelling. These are scarce, high-profile assets with long-term appreciation potential, often tied to media rights deals that have historically grown faster than inflation. Add in the emotional appeal of owning a piece of a professional sports team, and it is easy to see why these strategies are gaining traction.

But as with most things in private markets, the story and the structure are not always the same thing.

What We Mean by “Sports & Media”

Before getting into risks and structure, it is worth grounding what this actually includes because it’s broader than most people think. At the core are professional sports franchises, typically minority stakes in teams across major leagues. These assets generate revenue from ticketing, sponsorships, merchandising, and most importantly media rights.

That’s where the “media” side comes in. A large portion of franchise value today is driven by long-term broadcasting and streaming agreements, which create visible and often growing cash flows.

Beyond teams, the opportunity set can also include adjacent areas like sports data, production and distribution platforms, and other businesses tied to live content.

In most cases, investors aren’t buying a single team. At the institutional level, that might mean direct ownership. In the wealth channel, it often comes through layered structures like evergreen funds.

And that layering is where structure starts to matter.

A lot of capital has poured into sports, especially more recently through the retail channel, and valuations have followed, raising real questions about what returns look like from here.

The Appeal Is Real but So Are the Tradeoffs

There’s a reason institutional capital has been allocating to sports and media for decades. Franchise values across major leagues have compounded at attractive rates, driven by limited supply, global fan bases, and the steady growth of broadcasting and streaming rights. Media platforms themselves, particularly those tied to live content, have proven resilient in a world where on-demand content is increasingly fragmented.

From a portfolio construction standpoint, these assets are often positioned as diversifiers. They’re less directly tied to traditional economic cycles, and in theory, they offer a hedge against inflation through pricing power embedded in media contracts and ticketing.

That’s the pitch.

And it’s not just theoretical anymore. Firms have built large institutional platforms focused on acquiring minority stakes in professional sports franchises, reinforcing the idea that this is now a recognized asset class. More recently, platforms like CAIS have begun packaging access to these types of strategies into what is at least initially a fund-of-funds structure designed specifically for RIAs and high-net-worth investors.

That evolution, from direct institutional ownership to packaged access vehicles, is where things start to get more nuanced.

The Intangible Appeal and the Risk That Comes with It

There’s also a piece of this that doesn’t show up in pitch decks or performance projections, but it absolutely influences behavior.

Owning a stake in a professional sports team is, objectively, a cool thing. It’s one of the few investments where clients can say they own a piece of something they watch every week. It’s easy to talk about. It resonates at dinner tables. It carries a level of social currency that most private investments simply don’t.

And that matters more than people realize.

We’ve seen time and time again that when an investment has a strong emotional or “status” component, it can subtly shift how decisions get made. The focus moves away from structure, liquidity, and underwriting discipline, and toward the story. The asset starts to feel unique or insulated from the risks that apply everywhere else.

That’s where things can go wrong.

The reality is that these are still financial assets. They are subject to valuation risk, liquidity constraints, and manager execution just like any other private investment. In some cases, the “cool factor” can lead to complacency. Investors may be more willing to accept aggressive structures, less transparency, or misaligned liquidity terms simply because the underlying asset feels differentiated.

From our perspective, that’s exactly when you need to lean in, not pull back.

We try to strip the investment down to its fundamentals. If you take away the logo, the league, and the narrative, what are you left owning? How is the return being generated? What are the real risks and how do they show up in different market environments?

Because while it may feel great to say you own a piece of a team, the outcome that matters is still the same as any other investment. Did it perform the way it was supposed to and did it behave the way you expected when you needed it to?

That’s the lens we bring to every opportunity in this space.

Liquidity: The Core Tension in the Structure

At the center of most sports and media strategies today is a structural tension that should feel familiar to anyone following private credit or real estate: long-duration, illiquid assets being placed inside vehicles that offer some form of periodic liquidity.

Owning a minority stake in a professional sports team is not a liquid investment. Transactions are infrequent, highly negotiated, and often subject to league approval. Media rights deals are long-term contracts, and while they generate cash flow, they don’t create natural exit points on a predictable timeline.

Despite that, many of the newer vehicles coming to market, particularly those being distributed through wealth channels, are structured with quarterly liquidity, periodic redemption windows, or some version of “evergreen” capital.

This mismatch matters.

Liquidity in these funds is not created by the underlying assets suddenly becoming liquid. It’s managed. That can mean using incoming subscriptions to fund redemptions, maintaining credit lines, holding cash buffers, or, when necessary, gating withdrawals.

None of those tools are inherently problematic. In fact, they’re often necessary. But they do change the nature of the investment, especially from the client’s perspective.

If inflows slow and redemptions increase, the manager is left with limited options. Selling high-quality, long-duration assets in a secondary market that may not be deep or efficient is rarely attractive. More often, liquidity is rationed. That’s where gates come into play.

Our job in due diligence is to stress that system. What happens if subscriptions slow materially? What happens if a large percentage of investors request liquidity at the same time? How does the manager prioritize redemptions and what tools do they have to manage that pressure without impairing the portfolio?

When a strategy that was historically designed for long-term, patient capital starts to be packaged for a broader audience, the structure becomes just as important as the asset itself. In some cases, more important.

For advisors, this becomes less of an investment conversation and more of a business risk conversation. Clients who believed they had access to quarterly liquidity may find themselves locked in for longer than expected. Even if the underlying assets are performing, the experience can still be negative.

Valuation and Return Expectations

Another area that deserves attention is how returns are being generated and how they’re being communicated.

A significant portion of the historical return in sports has come from multiple expansion. As more capital has entered the space, valuations have moved higher. That’s been a tailwind for existing owners, but it also raises the question of what future returns will look like from today’s entry points.

Scarcity is keeping franchise valuations high, but access is the real constraint. As funds scale without corresponding access to team equity, you get dilution and less exposure to the “sexy” team ownership and more exposure to media and adjacent assets.

Media dynamics are evolving as well. Traditional broadcasting models are being disrupted and while live sports remain one of the most valuable forms of content, the distribution landscape is changing quickly.

None of this means the opportunity set is unattractive. It just means that underwriting needs to be grounded in realistic assumptions, not extrapolations of the past.

How We at Divergent Think About Underwriting Sports & Media

At Divergent, we don’t start with the asset class. We start with exposure and structure.

When we look at a sports or media fund, the first thing we want to understand is what the portfolio actually owns. That sounds simple, but it’s often where the real insights are. Is the fund concentrated in a handful of marquee franchises or is it spread across minority stakes with limited control? What leagues are involved and what are the governance dynamics around ownership transfers? How dependent are returns on continued multiple expansion versus underlying cash flow growth?

From there, we spend a significant amount of time on the manager. Not just their track record, but how they source deals, how they gain access to transactions that are often relationship-driven, and how they think about underwriting at current valuations. In a market where franchise prices have been bid up significantly, discipline matters.

We also look closely at how the fund is structured. How is liquidity managed? What are the redemption mechanics? Under what conditions can gates be implemented and how long can they remain in place? Are there credit facilities being used to bridge liquidity, and if so, what are the terms? Is there a point where they would stop taking money if they don’t see attractive opportunities?

These are not edge-case questions. They’re central to how the investment will behave.

Bringing It Back to the Advisor

At the end of the day, the role of the advisor is not just to access interesting investments. It’s to translate those investments into outcomes that make sense for clients.

Sports and media can absolutely have a place in portfolios. They offer unique exposures and in the right structure, can be a valuable diversifier. But they also come with complexities that are easy to overlook, especially when the story is compelling and the assets are high profile.

What we’ve seen over and over again is that structure drives experience. Two funds can own similar assets and produce very different outcomes for investors simply because of how liquidity, valuation, and capital flows are managed.

That’s where we spend our time.

Final Thoughts

There’s no question that sports and media will continue to attract capital. The assets are scarce, the narratives are strong, and the long-term demand for content, especially live content, is not going away.

But as the asset class becomes more accessible to a broader set of investors, the importance of disciplined underwriting only increases.

At Divergent, we view these opportunities through the same lens we apply across private markets. We’re less focused on the headline appeal and more focused on what sits underneath: the structure, the manager, the alignment, and the way the investment behaves under stress.

Because in private markets, that’s ultimately what matters.

About Divergent Capital Asset Management

Divergent Capital Asset Management helps RIAs and family offices access and build customized portfolios of private market investments including private credit, private equity, venture capital, and real estate. The firm provides institutional quality infrastructure for sourcing, structuring, and managing alternative investments. They handle everything from due diligence to administration, allowing advisors to offer branded, turnkey private market solutions. Divergent’s platform bridges the gap between access and independent advisor needs.

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