AI is set to dramatically boost sports team valuations, says Arctos Partners’ Charles, as artificial intelligence reshapes how fans consume content and how investors view live sports. According to Ian Charles, managing partner at Arctos Partners, the rapid rise of AI-driven media will only strengthen the appeal—and value—of professional sports teams and their media rights.
Speaking to Inside Alts, Charles explained that as AI-generated video, short clips, and digital content flood online platforms, live sports will stand apart as one of the last forms of truly irreplaceable entertainment. In an era where attention is fragmented, real-time games and in-person experiences command a premium. Fans are willing to pay more to be part of something authentic, communal, and unscripted—driving team valuations steadily higher.
Charles describes sports as the ultimate “appointment viewing.” Unlike on-demand content, live games bring people together emotionally and socially. From cheering and celebrating to sharing heartbreak, sports provide a rare sense of belonging and tribal connection. That emotional pull, he says, is becoming exponentially more valuable within the broader media ecosystem.
Arctos at the Center of the Sports Investment Boom
Arctos Partners has played a major role in the transformation of sports into a mainstream investment class. The Dallas-based firm manages roughly $15 billion in assets and has helped lead the expansion of private equity into professional sports ownership and capital raising. Notably, Arctos is the only private equity firm approved to hold equity stakes across all five major North American leagues: the NFL, NBA, MLB, NHL, and MLS.
That dominant position has not gone unnoticed. Recent reports suggest that private equity giant KKR has agreed to acquire Arctos at a valuation of about $1 billion, while keeping Charles and the current leadership team in place. Although Arctos declined to comment publicly, the reported deal underscores just how valuable the firm’s sports-focused strategy has become.
Despite growing chatter about a possible bubble in team valuations, Charles remains confident that sports investing is still in its early stages.
Two Powerful Engines Driving Team Values
Charles points to two core forces behind rising sports valuations. The first is league revenue, which is shared among teams and functions much like intellectual property—durable, scalable, and increasingly global. The second is the local live entertainment business, driven by stadiums, ticket sales, and in-venue experiences.
What makes this combination so compelling, he says, is the lack of direct competition. Each team effectively controls its local market for a specific form of live entertainment. Together, these assets create a rare investment profile: stable, defensible, and difficult to replicate.
Consistent Returns and Portfolio Protection
Historically, major North American sports teams have delivered strong performance compared to public markets. Charles noted that over three-, five-, and ten-year periods, team valuations have often outpaced public equities, with relatively low volatility. Even more attractive to institutional investors, sports assets tend to be largely uncorrelated with stocks, offering diversification and the potential for true “alpha.”
Once dismissed as vanity purchases for billionaires, sports teams have evolved into disciplined, revenue-driven businesses. Regulatory shifts have accelerated this change. In 2024, the NFL approved select private equity firms to acquire minority stakes in teams, becoming the last major U.S. league to formally open its doors to PE investors.
Today, nearly one in five professional sports teams has some level of private equity backing, according to JPMorgan. The bank also reports that combined returns across the NFL, NBA, MLB, and NHL have exceeded those of the S&P 500 since 2014.
Why Sports Weather Economic Storms
Another key advantage, Charles said, is that sports tend to be anti-cyclical. Much of the industry’s revenue—often 70% to 80% in premium leagues—is locked in through long-term contracts tied to media rights, sponsorships, and partnerships. These deals include guaranteed payments and built-in escalators, insulating teams from short-term economic downturns.
Whether GDP rises or falls, the games still go on, and fans keep watching.
Where Arctos Draws the Line
That doesn’t mean every sports investment is a sure thing. Charles said Arctos remains focused exclusively on the five major leagues, steering clear of emerging sports such as padel, pickleball, and electric powerboat racing, which have yet to prove long-term durability.
While some of these formats may grow, he cautioned that it’s far from clear which leagues will still matter decades from now. By contrast, marquee events like the Super Bowl are almost guaranteed to command global attention well into the future.
One area with breakout potential, however, is women’s sports. Charles believes that at least one women’s league will eventually rise to global prominence, capturing massive audiences and fandom worldwide—even if it’s not yet clear which league or where it will be based.
As AI continues to transform media consumption, Charles’s outlook is clear: far from diminishing the value of sports, technology is making live competition more powerful than ever—and investors are taking notice.
