The Tampa Bay Lightning team is close to concluding an agreement to sell a minority stake to a private equity firm, according to the team owner and a person familiar with the matter, making the National Hockey League the latest professional sports league to embrace institutional investment as franchise valuations soar.
Hedge fund manager Jeff Vinick, majority owner of the Stanley Cup champions, told the Financial Times in a statement that he was “in discussions to sell the minority position” and that he would retain control of the team’s parent company, Vinik Sports Group, “if the minority sale is completed.”
The NHL Board of Governors voted Thursday to approve the sale of Lightning’s stake to sports-focused private equity firm Arctos Sports Partners, a person familiar with the matter said, adding that the deal remains subject to terms.
The NHL and Arctos declined to comment.
Lightning and the NHL’s move to welcome private capital underscores a shift in how sports leagues are owned in North America, as Wall Street increasingly views sports teams as investment real estate.
The National Football League is now the only major men’s professional sports competition in the United States with no institutional ownership provisions. Major League Baseball, the National Basketball Association, and Major League Soccer have all modified their ownership rules since the spring of 2019.
Since then, a cottage industry of private equity and institutional investors — including Arctos and RedBird Capital Partners, as well as Dyal Capital and asset manager Ares Management — has raised funds and committed to a mix of debt and equity investments in teams across the continent.
NBA rules generally require that institutional stakes in clubs be passively owned, with a cap on both individual funds and the total holdings of funds for each club.
Since the turn of this century, the value of sports franchises has risen faster than many other financial benchmarks, including the S&P 500 stock index.
In June, tech entrepreneur Michael Dell and private investment group Sixth Street Partners reached a deal for a combined 30 percent stake in the San Antonio Spurs basketball franchise, valuing the Texas franchise at $1.83 billion, according to people familiar with the matter. Most of the team is owned by the family of billionaire Holt, who bought Tottenham for $76 million in 1996, according to Forbes.
Other franchises, including the Utah Jazz for basketball and the New York Mets for baseball, have sold for $1.66 billion and $2.4 billion, respectively, over the past year.
Arctos has raised more than $2.1 billion since April of last year for its first sports investment fund, totaling more than $3 billion in assets under management and stakes in the Golden State Warriors for basketball and the Sacramento Kings as of October.
Also on Thursday, the NHL also agreed to sell majority ownership of the Pittsburgh Penguins franchise to Fenway Sports Group, the holding company behind Premier League football club Liverpool and the Boston Red Sox baseball, which itself includes minority institutional investments from Arctos and RedBird.
The Financial Times previously reported that the penguins are valued at more than $850 million, although the NHL said in a statement that “the purchase remains subject to negotiation and implementation of documentation before the deal can be closed.”
The NHL, which operates throughout the United States and Canada, earlier this year signed a new seven-year media rights deal with WarnerMedia’s Turner Sports worth $225 million.
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