Employment & Labor Insider

EDITOR’S NOTE: This is Part one of a two-part series of articles analyzing the issue of player equity in sports.  A longer version of this article was previously published on Forbes.com.

In recent years, all of the major North American sports leagues have changed their ownership rules to allow specialist private equity funds to buy non-controlling stakes in their clubs under strict rules.

The change in rules reflected the fact that sports teams had generally become too expensive for private individuals to buy. As franchise valuations have grown far faster than player salary caps and wages, some players – including basketball star Steph Curry – have called for allowing players to receive equity interests in the clubs for which they play. 

Whether that is a realistic goal is unclear.

Valuation explosion

According to Forbes, National Football League clubs are worth an average of $7.1 billion each, a 25 percent increase since 2024. The other major American leagues are also of substantial and growing value – clubs in the National Basketball Association are worth $4.4 billion on average, National Hockey League clubs $3.8 billion, and Major League Baseball clubs $2.6 billion. 

The valuations for NFL, NBA, and NHL clubs have more than doubled over the last five years.

The rise in franchise values can generally be attributed to supply and demand. There is generally a very fixed supply of professional sports teams, and only a handful are actively on the market at any given time. Moreover, sports teams are the ultimate vanity asset – something billionaires love to own without too much concern about possible operating losses (which are likely to offset taxable gains elsewhere).

As a result, it had become too difficult to find a small number of individuals with sufficient capital to buy and operate a team (and its related assets, such as a stadium). So in recent years, all of the major American professional sports leagues have amended their ownership rules to allow investment by private equity firms. The rules governing these investments are strict: they require long-term investment, they limit the number of teams in which firms can invest, and they limit the control that can be exercised by the firms.

Several firms and clubs have taken advantage of the changes. Arctos has taken shares in the Buffalo Bills, Boston Red Sox, Houston Astros, Los Angeles Dodgers, San Diego Padres, San Francisco Giants, Golden State Warriors, Sacramento Kings, Utah Jazz, Minnesota Wild, New Jersey Devils, Tampa Bay Lightning, and Utah Hockey Club, among other sports assets. 

Blue Owl Capital Corporation’s Dyal HomeCourt Partners fund bought stakes in the Atlanta Hawks and Phoenix Suns, and the Miami Dolphins also recently sold a small stake to Ares Management.

The players’ share?

The rapidly rising franchise values have caused some players to consider whether they are getting their fair share of the business that relies in large part on their labor. Most notably, in the summer of 2025, Mr. Curry argued that players are underpaid because they are not allowed to share in the upside that comes with an equity interest in the club.

Instead, the players in the NFL, NBA, and NHL have generally fought over the last several decades for the right to receive a guaranteed portion of the revenue received by the leagues and their clubs (generally around 50 percent) in exchange for salary caps. (MLB remains the one league without a salary cap, although it does have a luxury tax system that penalizes clubs whose payrolls exceed certain thresholds.) For context, the NFL salary cap for 2025 is $279.2 million. The NHL’s is set to be $95.5 million in the coming season.

Although these amounts are substantial, they pale in comparison to the team valuations.  Seemingly for these reasons, the Women’s National Basketball Players Association had said it wanted an “equity-based” model in advance of ongoing labor negotiations with the Women’s National Basketball Association. What the union meant is not entirely clear, but it probably reflects the fact that the players do not feel they are receiving a fair share of the growth in the league’s value, even if the teams lose money on paper.

Steph Curry’s comments are particularly notable, given the relatively strong working relationship between the NBA and the National Basketball Players Association. Mr. Curry emphasized the intended partnership between club owners and players, which was reflected in changes to the parties’ 2023 collective bargaining agreement. That agreement allows players to own up to 1 percent of the publicly-traded shares of a company that directly or indirectly owns an NBA team (no NBA teams are currently owned by publicly-traded entities). The agreement also allows the Players Association to have a passive investment in the private equity funds that invest in NBA teams. And finally, the league and players agreed to form an Investment Committee to consider additional investment opportunities by players, including in businesses affiliated with NBA teams.

There is some precedent for players’ desire to own a part of the teams for which they play. The Players’ League was a player-created and partially-owned baseball league that formed and played in 1890 after disputes with other leagues. It folded after one season amid rapid changes to professional baseball. In 1999, hockey star Mario Lemieux bought the Pittsburgh Penguins out of bankruptcy after the club owed him $32.5 million in deferred salary. Mr. Lemieux returned to the ice the next season and was a player/owner of the club until his second retirement in 2006. In 1998, the Denver Broncos offered John Elway the opportunity to buy 10 percent of the team for $15 million and another 10 percent by foregoing $21 million in deferred salary. The NFL reportedly approved the deal, but Mr. Elway declined it. Finally, most recently, Unrivaled, the 3-on-3 women’s basketball league, has provided some of its players with equity.

Then, of course, it is common in many industries for companies to offer stock or stock options to their employees in an effort to retain talent and align incentives. 

In next week’s article, I will explore the possibility of players owning equity shares in the teams for which they play.