Checkpoint: How Private Equity Is Changing The NBA
Nick M Do
Major league sports have always been profit-driven. Sports franchises are businesses, but there is supposed to be a symbiosis. Players get paid, owners get a good return on their investment, and fans get to watch elite athleticism and root for the teams they love, sometimes buying a jersey or two or purchasing tickets to sit in a buzzing stadium with thousands of other fans.
Recently, though, the dynamic between franchises and fans has begun to shift. Now, when you watch a basketball game, you’re inundated with ads from sports betting companies like Draft Kings and FanDuel, urging you to place a bet on the next play, which you’re almost certain to lose. The ads feature some of your favorite players, who tell the cameras that betting is fun, that’s a way to enjoy the game more, to be more immersed and invested. At halftime, instead of the analytics and highlights, now commentators argue over the Polymarket odds. Whatever the prediction markets are saying will happen, that’s what matters, and you should probably place a bet on that too.
The owners of the teams aren’t fans anymore either. Sports franchise owners have always been rich— they had to be to buy the teams. Even when the wealthy owners of teams weren’t necessarily good owners or good managers, they still cared. They still wanted their teams to win championships; their interests and fans’ interests were aligned. Now, though, franchises are assets rather than part of a legacy. Owners are part of an ultra-wealthy billionaire club, and many made their money through private equity, hedge funds, or other exploitative industries. This new crop of owners doesn’t care about improving the fan experience or having a winning team, they just want to park their money somewhere or build up the brand enough to make a profit on their investment. Rather than buying a franchise and keeping it as a lifelong passion project, new owners are buying teams just to extract as much revenue and inflate the franchise’s value as possible and then sell a few months later to make a profit.
The advent of sports franchises being treated as commodities coincides with the rise of valuations of and profits from these same franchises. These teams are being bought and sold for orders of magnitude more than they were in the early aughts. One reason why is the rise of sports betting, stemming from the 2018 Supreme Court decision in Murphy v. NCAA. Another is a supply and demand consideration— there is a finite number of sports franchises and more billionaires than ever before. Billionaires are willing to pay more for a flashy and reliably lucrative asset like a sports franchise, so the prices go up. Sports franchises are a good investment. They’re predictable and diversified. Owning a franchise means revenue from ticket sales, obviously, but there are also multi-billion dollar deals with media companies for the rights to stream games, profits from team merchandise, high-margin sales of VIP club and luxury stadium suites, plus the aforementioned sports betting.
It’s no wonder that increasing numbers of billionaires are buying and selling teams at a rapid rate. It’s a great way to make a quick buck— or a quick billion, but it’s hurting the teams and the integrity of the sports. Billionaires and ultra-wealthy business tycoons aren’t alone in making these investments, either. In 2022, the NBA amended its ownership rules to allow institutional investors, so now private equity, hedge funds, and sovereign wealth funds can all get in on the action. Private equity has a long history of ruining just about everything it touches, so when rich investors backed by PE firms make bids for franchises, it’s worrisome. Owners are intended to be stewards of sport, to be their teams’ biggest fans. Billionaires and private equity firms, however, have short-term interests and think they can milk franchises for profit or pay to win and corrupt the game. In the NBA, three teams, the Los Angeles Lakers, the Los Angeles Clippers, and the Portland Trailblazers, have been acquired and/or sold by ultra-wealthy buyers backed by institutional investors. A series of scandals and drama has ensued, and fans are paying the price.
On August 12, 2026, venture capitalist Joshua Kushner and former Disney CEO Bob Iger, backed by a private equity firm, agreed to buy the majority stake in the Los Angeles Lakers for $12.5 billion from asset management CEO Mark Walter. Just over a year prior, on June 18, 2025, Walter purchased the stake for $10 billion from the Buss family, who had held it for decades. The sale to Kushner and Iger is currently pending approval by the NBA’s board of governors, but if it goes through, Walter will have made $2.5 billion in a year by buying and selling his stake in the Lakers franchise, and it will make the Lakers the most valued franchise in basketball. It’s clear that the era of family-owned franchises and fan-owner dynasties is over. There’s money to be made in sports, and profit-driven investors are closing in.
In 2014, former Microsoft CEO Steve Ballmer purchased the Los Angeles Clippers for $2 billion. In June of 2019, the Clippers traded the Toronto Raptors for player Kawhi Leonard. For Leonard, this trade meant a $103 million contract, and, as a 2025 investigation by sports journalist Pablo Torre yielded, an additional $28 million brand deal with Aspiration Inc., a sustainably-focused startup in which Steve Ballmer was a major investor. Torre’s investigations found that Ballmer offered Leonard the lucrative brand deal, plus $20 million in Aspiration stock, on top of his contract, which violates the NBA’s salary cap rules. Steve Ballmer wanted to make the Clippers into a more profitable team, and he saw player Kawhi Leonard as the way to do it. He used his business connections to skirt the salary cap requirements that are fundamental to the integrity of the NBA and to keeping the league competitive. After over a year of investigations, the NBA has now fined the Clippers $30 million, and the team has lost five first-round draft picks over the next five years. Ballmer has also been suspended for a year. These are the most severe consequences that the NBA has ever doled out, and the only reason they’re necessary is because Ballmer thought that he could use his assets and connections to disobey NBA regulations with impunity.
In March, 2026, the NBA approved the sale of the Portland Trailblazers to Tom Dundon, who was backed by private equity. While Dundon’s net worth is over $2 billion, he is nicknamed “El Cheapo” and is notorious for running sports franchises as cheaply as possible. In the case of the Trailblazers, he has declined to contract necessary repairs for stadiums, refused to pay for players’ meals and hotels, laid off 70% of team staff, and offered coaches well-below market salary for their work. Dundon made his money via predatory lending, by creating a company to give high-interest car loans to people with bad credit. Dundon has only been the owner of the Trailblazers for a few months, but he’s already operating out of the standard private equity playbook. He’s “trimming fat” or cutting costs to make the franchise appear more profitable, and perhaps this indicates a future plan to sell the team for a good return on his investment.
Over the last decade, private equity firms have become notorious for infiltrating the retail and hospitality sectors, stripping struggling companies of assets, and then running them into the ground. This happened with familiar brands like Red Lobster, Toys ‘R’ Us, Joann Fabrics, and Sears, and now professional sports are private equity’s next victim. Private equity firms back wealthy million- or billionaires, support leveraged buyouts of businesses or franchises, using borrowed money to buy the business companies, then saddle the newly-acquired companies with that debt. To cut costs and increase efficiency, the private equity firms cheapen out on materials, lay off workers, and close storefronts. Once acquired by a PE firm, companies are far more likely to go bankrupt. Of the 21 restaurant chains that declared bankruptcy in 2024, 10 of them had recently been acquired by private equity.
As the NBA just opened franchises to institutional investors in 2022, we’re only seeing the beginning how billionaires, private equity, and the treatment of franchises as sellable assets will change professional basketball. Fans are already paying the price for ultra-wealthy, profit-driven, and corrupt franchise ownership. Clippers fans, for example, will endure years of their team not having a first round draft pick, and Trailblazers fans are visiting a stadium in desperate need of repairs. If the Lakers, Clippers, and Trailblazers are any indication, we’re going to see a lot more of some of the country’s favorite teams being bought, flipped, and sold so that billionaires and their backers can continue to enrich themselves.
