Buying into two of sports’ preeminent franchises in one week probably wasn’t by design for Sixth Street, but the private equity firm has announced itself as a major player in sports investing by securing stakes in both the Boston Celtics and San Francisco Giants.
Sixth Street isn’t necessarily looking for attention—while it has $100 billion under management, it isn’t the lead buyer of either the NBA or the MLB franchise, and a spokesperson declined to comment. But the heft of its minority investments into both teams dwarfs most other limited partner buys into franchises. Though financial details of some deals aren’t disclosed, Sixth Street probably has invested at least $3 billion in sports the past four years.
The Celtics deal appears to be Sixth Street’s biggest sports commitment to date. The firm’s investment—which, according to multiple people involved in the process, is $1 billion and includes at least some equity in the team—helps the William Chisholm-led group notch the NBA’s most valuable team purchase at $6.1 billion. Given the dollar amounts, it’s possible Sixth Street is acquiring the maximum 15% ownership any one institutional investor is allowed to own in an NBA franchise as part of its deal. Just two days prior, the 16-year-old business bought 10% of the San Francisco Giants at an undisclosed price..
While private equity investors in North American sports leagues are nearly always required to be passive investors with no position to actively manage the clubs, it’s a mistake to paint the firm’s activities as uncaring about on-field results. Sixth Street’s investing history suggests that associating with winning franchises is a part of its approach to develop teams into global brands. Winners are more likely to draw a global audience.
Sixth Street began investing in sports in 2021 when it purchased 51% ownership of Legends, the events and hospitality business started by the Dallas Cowboys and the New York Yankees, at a valuation of $1.35 billion. The Cowboys and the Yankees remain co-owners. The firm’s thesis in entering sports then was that clubs would need capital to help rebound from the pandemic.
Longer term, the investment fund saw the breakdown of traditional media paths, like cable television, as opening up teams to greater potential audiences through streaming, while also allowing them to create entertainment of various sorts for fans throughout the year. The biggest sports team brands, the firm believes, can shift away from being local, seasonal operations to global, year-round entertainment businesses.
In addition to the defending NBA champion Celtics and the Giants, Sixth Street has invested in Real Madrid, FC Barcelona and the San Antonio Spurs (a 20% stake), as well as becoming the majority owner of the NWSL’s Bay FC. In most deals, Sixth Street’s investment includes a real estate element—for example, it’s helping Real Madrid revamp its stadium and plans to develop land outside Oracle Park with the Giants, as examples. But the Celtics deal is real-estate free: the NHL’s Bruins own TD Garden while New Balance owns the team’s Brighton practice facility.
Sixth Street was also approved by the NFL last summer as one of a handful of firms permitted to participate in team ownership, and it was in discussions for a time with Florida State University for a possible investment into the athletic department, though those talks ended last year.