In most businesses, making money is the ultimate test of success and the owner of the business is singularly focused on the current and projected earnings. In sports, no one wants to lose money or make less than is realistically possible, but the best owners are not as obsessed with the financial bottom line as are owners of regular kinds of businesses. And for the best, winning easily beats the financial bottom line.
Some say there is a bubble-like frenzy to buy or invest in sports teams. That type of frenzy does not always end well for the last set of investors. Investment bubbles have been around since investing began. It is always difficult to say one is in a bubble for certain until it has burst, and few are really adept at predicting these bursts or exactly when they might occur. Even the smartest investors sometimes get caught up in chasing assets at values unlikely to last.
I wondered to myself if I was chasing a bubble when I decided to abandon my decades-long rule of looking only from the sidelines as my friends were buying sports teams (and seemingly making large sums when they sold them). Nonetheless, with my hometown Baltimore Orioles I finally took the plunge.
All professional sports are businesses; the team owners, with essentially no exceptions, want to make a profit on their investment. Over the past 100 years or so, the owners of professional sports teams in the big four U.S. team sports—baseball, football, basketball, and hockey—have not generally made meaningful profits on the operations of their teams (though the NFL teams, because of the immense popularity of attendance at games and the TV and streaming viewership, resulting in multibillion dollar media deals, have for the most part become quite profitable on an operating-business basis in recent years).
For many decades, those business leaders who were the wealth iest in the US did not see sports ownership as all that attractive a route to profitability or enjoyment. As a result, while some wealth was required to buy teams, the country’s wealthiest individuals tended to focus their attention elsewhere. Many of them did not want to subject themselves to the ups and downs of sports ownership; to the criticism of local sports fans and journalists; and to the need to deal with the state and local government officials who would provide some pushback to what owners might want.
If one looks at who the owners of Major League teams were from the 1930s through the 1980s, they were rarely the wealthiest individuals in the country or the most respected leaders of the corporate or investment worlds.
A perfect example occurred in 1972.
The New York Yankees, baseball’s most storied franchise, was owned by CBS. It had paid $11.2 million for the team in 1964; after just eight years of ownership, it decided to sell the Yankees.
At this time, the team did not attract bids from the country’s wealthiest investors. The winning bidder was a little-known businessman from Cleveland, George Steinbrenner, who bought the team for a stated price of $10 million. After various adjustments the net price was about $8.8 million. Steinbrenner did not have anything close to that amount of money, so he formed a syndicate to make the purchase. He invested $250,000 of the required price.
The other investors were for the most part wealthy individuals, but the fact that the team could have been bought by someone who invested just $250,000 of his own money shows that there was not an overwhelming demand then for sports teams.
What has changed?
There are many differences between then and now. Of course, inflation since the 1970s distorts the number a bit. And the population of the country has grown a fair bit, so there are many more possible fans. The U.S. population in 1964 was about 191 million; today it is 348 million. But the major factors are probably these:
1. The growth in interest in live television programming has provided sports teams with TV and streaming networks that are able to justify paying once-unheard-of prices for the right to show these teams’ games on those networks.
2. Legalized betting has clearly been popular, and that has no doubt contributed to the greater fan interest. In the 1970s, legal sports betting outside of a few places like Las Vegas really did not exist; now it is everywhere, and the desire to bet on sports seems to be growing and to be universal.
3. There are many more highly wealthy individuals than existed in the 1970s. The growth in wealth created by entrepreneurs and business leaders in technology hedge funds, private equity funds, and other investment vehicles has grown exponentially in recent years. When the Forbes 400 was created in 1982, a net worth of $100 million was required to get on the list. Today, a net worth of $3.8 billion is needed. (There are now estimated to be about 925 billionaires in the U.S.)
4. The growth of public pension funds and sovereign wealth funds has been enormous since the 1970s. At that time, US public pension funds were not even permitted by law to invest in private investments like sports teams, for they were not considered “prudent investments.” Today, these funds have provided investment capital for a number of sports owners.
5. Large sports funds have been raised in recent years by private equity investors, and that capital has been attractive to those who are interested in buying sports teams but need more equity capital. (These funds are typically passive in their ownership and thus do not tend to disrupt the operations of the team by the control or general partner of the acquisition team. One of the largest of these passive funds, Arctos Partners, was itself sold in early 2026 to KKR at a valuation of $1.3 billion.)
6. Increasingly, ownership is seen as an enjoyable experience by most of those who buy or want to buy sports teams. The owners tend to be fairly visible in their communities, and for those interested in such visibility, owning a team provides that opportunity. The result is that the very successful owners are now often better known than most of the players on their teams. Ask an average American who owns the Dallas Cowboys, and the response is likely to be Jerry Jones. Ask the same person to name the team’s star, and you are likely to get a blank stare.
Excerpted from Inside the Owner’s Box: Conversations on Power and Leadership in Sports by David M. Rubenstein. Copyright 2026 © by David M. Rubenstein. Reprinted by permission of Simon & Schuster, LLC.
