Sports Teams Should Open 'Floodgates' to Sovereign Wealth, Leonsis Says

Welcome back to the Business of Sports. Yesterday we hosted our annual Power Players conference in New York (stream the whole event here) that featured Maria Sharapova and Karl-Anthony Towns. There was also a lot of news! If you didn’t make it, we’re going to break down the stories and gossip we heard into a helpful cheat sheet.

And check out our discussion on money and college sports here.

As always, send us any feedback, tips or ideas here. If you aren’t yet signed up to receive this newsletter, you can do so here.

Sovereign Wealth > Private Equity

In a sit-down with Bloomberg’s Scarlet Fu and NHL Commissioner Gary Bettman, Ted Leonsis, owner of the Washington Capitals, reveled in defending his company taking on a sovereign wealth fund as an investor.

“The floodgates really should open,” Leonsis said. “It’s the smart play because they’re very patient.”

Monumental Sports and Entertainment CEO Ted Leonsis during the Bloomberg Power Players New York event in New York on Sept. 4.

Leonsis was comparing sovereign wealth to private equity, which he said would potentially be a more involved partner because they eventually need to exit the investment.

Monumental Sports & Entertainment, Leonsis firm that also owns the NBAs Wizards and WNBAs Mystics, sold a 5% stake to the Qatar Investment Authority in 2023. It’s the only owner of a major US sports team to take on sovereign wealth. Some leagues, including the NFL, don’t allow such investments, while others allow them to make small, passive investments.

Qatar said: “We want safe harbor; we don’t want an exit,” Leonsis said. “Very patient capital. And a lot of capital. We know that some of the funds running around in sports it’s $3 billion, it’s $5 billion. Sovereign wealth funds have trillions of dollars.” — Matt Townsend

Olympic Risk

America’s Olympic edge is under pressure as college sports face a funding shakeup. The rise of name, image and likeness deals has funneled money toward football and men’s basketball, leaving Olympic feeder sports such as swimming, wrestling and track at risk.

UCLA’s Athletic Director Martin Jarmond warned in a panel with me that the US could hit a “cliff” without a new model.

Martin Jarmond, director of athletics at University of California at Los Angeles (UCLA), during the Bloomberg Power Players New York event in New York on Sept. 4.

Cuts are already biting: Virginia scrapped diving, Cal Poly dropped swimming and diving, and Washington State pared back track. At Paris 2024, nearly 85% of US medalists came through college programs — highlighting the vulnerability of the pipeline.

The NCAA’s recent settlement allowing direct athlete pay adds millions in new costs, straining budgets further. Duke Athletic Director Nina King called the system unsustainable, saying non-revenue sports may not survive.

Private equity has been floated as a fix, but deals have stalled. For now, schools are scrambling for answers, and America’s Olympic dominance hangs in the balance. — Janet Lorin

NBA Players Want Ownership

New York Knicks center Karl-Anthony Towns joined me on stage for a conversation about his move to the Knicks last year, the pros and cons of the New York market, and his off-court aspirations.

Karl-Anthony Towns during the Bloomberg Power Players New York event in New York on Sept. 4.

My main takeaways, other than that Towns seems even taller in person, were the following.

NBA players want to be owners. Towns, unsurprisingly, told me he’d be interested in taking a stake in a team when he retires. There’s a growing sense among players that they shouldn’t have to wait until then. As it stands, the league’s collective bargaining agreement prevents players from direct investment in NBA franchises, though they can invest in WNBA teams (as long as they are not owned by NBA owners), and the players union can own stakes in funds that own minority stakes in teams.

Lately there’s been agitation around loosening the rules. In an interview with Complex in July, Steph Curry said this when asked if players were underpaid: “The idea that we can’t participate in equity while we’re playing is part of why I would say, yes, we are underpaid.”

I asked Towns about this idea. “There’s definitely a conversation there,” he said. “Steph is a perfect voice for that because the valuation of the Golden State Warriors has obviously had a huge improvement due to his presence.”

The catch, of course, is that players-as-owners would create serious conflicts of interests, unless the NBA and its players can figure out a league-wide, passive equity scheme.

The second thing I came away with is that NBA players know the All-Star game isn’t working. The game has become a farcical exhibition in recent years with absurd final scores. In 2024, the East beat the West 211-186.

“One of the things that I would like to see is to get that appreciation for the All-Star game back,” said Towns, who was elected a vice president of the players union this year. “That would be something we have been working on tremendously hard all summer.”

The league has tried letting players pick their own teams, as well as a fairly disastrous experiment with a confusing three-game tournament this past winter. In 2026, according to reporting from ESPN, they are going to try a Ryder Cup-ish United States vs. The Rest of the World format.

“Every year we are trying to see what really works,” said Towns, “I think that this year is going to be a fun one. — Ira Boudway

WNBA Fight

WNBA players are gearing up for a showdown with the league.

“We are in a labor fight,” union chief Terri Jackson, arguing that the current salary system is designed to undervalue players and must be tied directly to the league’s booming business.

The WNBPA opted out of its collective bargaining agreement in October, and little progress has been made with less than two months until the deadline. While Jackson stressed there’s time to avoid a work stoppage, she said players are pushing hard for a deal that reflects record TV ratings, attendance, and merchandise sales.

Commissioner Cathy Engelbert has previously insisted the model isn’t broken, pointing to revenue-sharing mechanisms that could be expanded. But tensions flared after her July comments players quickly donned shirts reading “pay us what you owe us.” The Phoenix Mercury’s Satou Sabally later called the league’s counterproposal a “slap in the face.”

Talks have dragged since December despite several player proposals. The league, fresh off announcing a $750 million expansion to 18 teams by 2030, says it’s committed to striking a deal that balances player demands with long-term growth. For now, both sides remain far apart and the clock is ticking. — Randall Williams

PE Hearts NFL

Private equity is just getting started in the NFL, and while valuations may slow their head-spinning growth, there’s little to suggest they’ll fall.

Ares CEO Michael Arougheti and Miami Dolphins CEO Tom Garfinkel took the stage with me for a freewheeling discussion about their partnership — one of the first cases of PE investing in the NFL.

Ares Management Corp. CEO Mike Arougheti during the Bloomberg Power Players New York event in New York on Sept. 4.

For Garfinkel, it’s been about money and advice as he and owner Stephen Ross accelerate their ambitions to make the Dolphins’ Hard Rock Stadium campus a year-round destination for tennis, racing and concerts.

Arougheti said he’s taken a Covid-era opportunistic bet on the future of sports and built a platform that’s thinking increasingly globally for new sports deals. But he hinted that the Dolphins likely aren’t the last NFL target for Ares. After all, literally nothing in sports is more profitable than American football.

“The business model of the NFL is probably one of the most durable in all of sports,” Arougheti said. “As we think about investing across the sports ecosystem, the NFL checks all the boxes.” — Jason Kelly

World Cup Rocket Fuel

I sat down with the president of US Soccer, Cindy Parlow Cone, and MLS Commissioner Don Garber. As heads of the two biggest US soccer entities, they have a really big responsibility coming up with the 2026 FIFA World Cup only nine months away.

“It’s both hectic and overwhelming, but also super exciting,” Parlow Cone said. “What people don’t realize is this is going to be the biggest World Cup that there has ever been. There’s 48 teams. It’s going to be like having four Super Bowls every single day for five weeks.”

Garber made the point that since the last time the US hosted the men’s World Cup in 1994, MLS has launched and now has 30 teams. Interest in soccer has jumped many times over since then.

“This is going to be bigger than anyone ever imagined,” Garber said. Our country loves big events. We’ve got incredible venues. It’s going to be massive.”

MLS also realizes what this World Cup, which is also being hosted by Canada and Mexico, could mean for the league.

“This is the rocket fuel that will drive popularity, interest and engagement in our sport,” Garber said. “We’ve got a lot of work to do.” — Vanessa Perdomo

College Monetization

Janet Lorin chatted with Jonathan Marks, chief business officer for global talent advisory firm Elevate Sports Ventures, about the new ways colleges are looking to generate revenue from their athletic departments.

“When we talk about revenue generation in college sports, we’ve had a lot of conversations this year that I never never thought we’d have,” Marks said.

Schools are talking to his firm about selling naming rights to stadiums, even ones considered iconic, and putting logo patches on jerseys. The latter moneymaker hasn’t been allowed yet, but Marks thinks it’s coming.

“So many assets you’ve seen in professional sports are now coming to fruition in college,” Marks said. “You’re seeing really every school wants to have that discussion today.”

Elevate, which advises sports entities such as the NHL and PGA Tour, operates as a private credit fund that loans schools money, while also offering operational expertise.

Going forward, the “most successful schools will be the ones thinking outside the box and looking for unique ways to maximize revenue,” Marks said. — Rene Ismail