Aiming to help foster more growth within sports investment, Morgan Stanley has created a new portfolio for interested investors looking to profit from increasing sports team valuations.
Morgan Stanley’s Custom Core Sports League strategy will be open for investors, starting at a minimum of $250,000 to participate in. The portfolio will allow interested parties to invest in an index of companies associated with sports sponsorship, media and advertising in various sports leagues.
Up to 13 sports leagues across the world will be available for investment as part of the Custom Core Sports League portfolio, including the NFL, NBA, Formula 1 and more.
The portfolio’s holdings will be made up of 250-400 securities from those aforementioned companies associated with sports, typically sponsors. This is selected from large US equities, drawing parallels to S&P 500.
The offering will also be backed by Nielsen Sports for real-time data tracking, spending and enhanced visibility for companies associated with the relevant sports leagues.
The aim for Morgan Stanley with this latest strategy is to help financial inclusion for those investors interested in sports ownership, but with sports team valuations skyrocketing over the past several years, this has proven to be extremely difficult.
CNBC reported that the Custom Core Sports League was born out of a question posed to Morgan Stanley’s Global Sports and Entertainment Division, Sandra Richards.
She commented: “We saw that there was a bigger opportunity to do something here. This one person represents many, and multiples of many that are looking to invest in sports as a fan looking to get engaged.
“We see the demand from our clients that are asking about ways to invest in sports, and it’s going to continue.”
Sports team valuations are at all-time highs, a result of inflation but due to the rise of more billionaires, media broadcast rights becoming extremely valuable and digital media creating a plethora of new revenue streams.
Take the NBA for example. One of its most successful teams over the last decade, the Golden State Warriors, went from a team that was bought for $450m in 2010 by a consortium led by Joe Lacob, to now being the most valuable NBA franchise with a valuation of $8.8bn.
The new portfolio from Morgan Stanley will aim to allow more investors a chance to place their investment into meaningful sports teams for not only potential long-term profit, but also be placed in a position to help bring forth new ideas to the management of high-level brands.
