Following the recent announcement of the National Basketball Association’s (NBA) decision to allow sovereign wealth funds to stake purchases of its franchises, suitors are lining up.
As reported by Bloomberg, the sovereign wealth funds of Qatar and the UAE, Qatari Investment Authority and Mubadala Capital Fund, are both interested in buying a stake in as of yet unnamed NBA franchises.
The Bloomberg article reveals that the New York Knicks are open to investment offers with its biggest equity shareholder, Madison Square Garden Sports being an investment firm of Silver Lake Management, with the latter owning a minority stake in Premier League football club Manchester City F.C.
Whilst minority ownership bids may only be speculation at this stage, NBA spokesperson Mike Bass has reaffirmed the league’s stance that “all such investments are subject to league review and NBA board approval.”
Whilst interest from QIA and Mubadala Capital are in the preliminary stage and official negotiations are not a guarantee, the recent move to allow these entities to become minority owners in their league suggests the exponential growth of basketball across the globe and the monetary value it holds.
The new private equity investor rules were introduced by Commissioner Adam Silver as the value of NBA franchises began to soar but do hold two key rules: equity providers may only own a maximum of 20% stake within a franchise. No franchise can collectively hold greater than 30% from institutional investors.
NBA ownership news comes off the back of a recent agreement with fintech firm Ant Group who are working with the basketball league to create digital content to enhance the fan experience.
The NBA has held a strong presence in China having hosted pre-season games in the country, and now with Ant Group – a Chinese-based firm whose parent company Alibaba was co-founded by current Brooklyn Nets owner Joe Tsai – will look to further develop those links by working with the fintech company to create digital content for the league.
