Business magnate Mark Cuban invests in a $750 million private equity sports fund
Mark Cuban, renowned for his stint on Shark Tank and previous tenure as the majority owner of the Dallas Mavericks, is now a part of a $750 million private equity sports fund, Harbinger Sports Partners Fund. The fund aims to invest in a variety of sports, including Major League Baseball (MLB), National Football League (NFL), and National Basketball Association (NBA).
Steve Cannon and Rashaun Williams are also included in the fund, with Cuban serving as a general partner. The fund aims to raise $750 million within the next two years.
Williams commented, "We're at the early stages of how we view investing in sports. Valuation growth is a result of core fundamentals, and as we move from sports 1.0 to 2.0, we see teams evolving from ticket and sponsorship sales organizations to media companies, even finding new revenue sources locally to boost revenue."
Cuban's Harbinger Sports Partners Fund plans to acquire numerous minority stakes in franchises, with reported intentions of keeping their stakes limited to around 5% in each.
Different sports leagues in the United States have unique rules regarding private equity ownership. For instance, in MLB, owners can sell up to 15% interest to private equity firms, while teams can sell up to 30% to minority owners in general. In the NFL, private equity firms can own up to 10% of a franchise, but can have a 10% stake in six different teams as long as the minimum investment is 3%. In the NBA, owners can acquire up to 20% of five different franchises, with no limit on the number of teams one can invest in. For ice hockey, one can buy into five teams with a maximum stake of 20% in each.
Recently, Cuban decided to leave Shark Tank, citing family as his official reason. He has been involved with the Dallas Mavericks and has expressed an interest in various other teams across different sports.
The Harbinger Sports Partners Fund, led by Mark Cuban, Steve Cannon, and Rashaun Williams, aims to invest significantly in sports finance, particularly in leagues like MLB, NFL, and NBA. Williams' comment emphasizes the evolving nature of sports teams, transitioning from sales organizations to media companies and exploring new revenue streams locally.
To diversify their investments, Cuban's fund plans to acquire minority stakes in sports franchises, adhering to the unique ownership rules in various sports leagues in the United States. For example, in MLB, they can own up to 15% of a single team, while in the NBA, they can invest in up to five different franchises, with no limit on the number of teams they can invest in.
