Hi Everyone,
Welcome to this week's edition of Extra Innings. I would like to inform all of my readers that this is the penultimate edition of Extra Innings. It has been an absolute blast creating the newsletter and keeping you all informed weekly. I look forward to continuing this project in a similar capacity on The Sponsorship Space website.
As the value of NBA franchises continues to appreciate at a roughly 12% rate, franchises are becoming too expensive for an individual or small group to purchase. Almost half of the NBA franchises are worth more than $2 billion and three teams are worth over $5 billion.
In a bid to help their franchises, the NBA is allowing private equity and “other types of institutional investors” to own up to 20% of a single franchise. Each team can have no more than 30% of the franchise equity owned by investment funds and there is no limit to how many funds can buy-in.
This opens the “playing field” to many more prospective buyers, which should help the franchises to continue their value appreciation. As of right now, only one fund, Dyal Homecourt Partners, has been approved to become a potential minority investor of teams. A second firm, Arctos Partners, is said to be seeking permission.
Notable Information From the Sports World:
Budweiser: For the first time in 37 years, Budweiser will not be marketing around the Super Bowl. Instead, the company will open its advertising space to Covid-19 vaccine awareness campaigns and to some of its other brands. Even though Budweiser will not be marketing, it still has exclusivity so you won’t be seeing any MillerCoors ads during the big game.
NHL: New NHL sponsorship initiatives could provide up to $16 million in value for the sponsors. The two most valuable locations are on-ice and rink edge wrap at a value of $2.8 million. The NHL continues to make fantastic business decisions during a tough year.
University of Michigan: The University of Michigan is in a two-week shutdown as numerous athletes have tested positive for a new Coronavirus variant. This could spell trouble for spring athletes who haven’t started their seasons This is the second Coronavirus issue that UM has faced, so their tolerance for playing sports may diminish.
Best,
Nick Goss
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