Mark Cuban, a billionaire entrepreneur and former Dallas Mavericks majority owner, will serve as a general partner for Harbinger Sports Partners Fund. The new sports-focused private equity fund is targeting minority stakes in NBA, MLB and NFL franchises. The fund looks to raise $750 million by 2027 and will be led by venture investor Rashaun Williams and former AMB Sports and Entertainment CEO Steve Cannon.
Williams, a limited partner with the Atlanta Falcons, and Cannon, who led the Falcons and MLS club Atlanta United under the AMB umbrella, will serve as the co-founders and managing partners for the fund. As institutional capital pours into sports, the firm is aiming to differentiate itself from others with its extensive operational experience complemented by its leaders’ deep ties to league offices and team ownership groups.
“We’re at the very early innings in how we view investing in sports,” Williams said in a phone interview. “Folks talk about the raw number in terms of valuation of these teams looking from the outside in, we focus inside as owners and operators, valuation growth is a result of core fundamentals. As we go from sports 1.0 to 2.0, we see teams moving from ticket and sponsorship sales organizations to media companies and even finding new revenue sources locally to grow revenue.”
Harbinger aims to acquire up to 5% in its minority positions, targeting about 15 total investments with deal sizes that range from $50-$150 million. The launch of the fund coincides with major sports leagues making multiple changes to ownership rules related to institutional investment. This includes the NFL, which became the last major U.S. sports league to allow private equity firms to invest into teams last year (only up to 10%, though). Harbinger’s strategy is based on these new policies, which allow firms to have multiple minority positions across different leagues.
The NFL allows a single fund to own up to six franchises. In the NBA, that number slightly drops to five teams (with a 20% maximum per), while MLB is the only major sports league that has no limit as to how many teams a single fund can invest in (but has a 15% maximum per).
The Atlanta-based fund is confident that it will be approved by each league once it meets specific guidelines. Harbinger, bucking the trend of capital spent on early-stage and emerging leagues, is focused on the three legacy leagues despite turmoil in the regional sports networks industry.
“Labor and media are the biggest issues in MLB but also opportunities, especially for those with experience and expertise in these areas,” Williams said. “We are long-term bullish on North America pro sports and specifically optimistic on MLB.”
Harbinger, which plans to deploy once it receives capital commitments, also aims to provide owners with secondary market liquidity solutions. It’s all part of the offerings to develop secondary transaction infrastructure to create flexibility for limited partners. The fund also brings expertise in stadium construction with Cannon, the former CEO at Mercedes-Benz USA, overseeing the construction of Mercedes-Benz Stadium in Atlanta.
“Pro sports teams owners and operators offer tremendous insight to underwriting, access to dealflow and support to teams open to value-add partners,” Williams added.