Family offices invest in sports franchises for three main reasons: fixed supply against rising demand, revenue that is increasingly driven by media rights rather than gate receipts, and an asset the next generation actually wants to be involved in. Selling is where it gets complicated, because what a family owns is not a team. It is a percentage, and the percentage carries rights that a price tag does not describe.

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We made the buy-side case last year in Why Family Offices Are Investing Billions in Sports, written when the Los Angeles Lakers were changing hands for the first time in nearly five decades. Everything in that piece got more expensive. This one picks up where it left off, on the other side of the trade: what happens when a family sells.

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What just happened with the Los Angeles Lakers?

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The sequence is worth laying out, because it compresses about twenty years of ownership evolution into fourteen months.

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Dr. Jerry Buss bought the Lakers in 1979, along with the Kings and the Forum, in a package deal priced around $67.5 million. (The Ringer) The family sold control to Mark Walter at a $10 billion valuation, approved unanimously by the NBA board of governors on Oct. 30, 2025. (ESPN) The family kept 17.8%, and the deal was structured to keep Jeanie Buss as governor through 2030.

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Less than a year later, Walter agreed to sell his controlling stake to Bob Iger and Josh Kushner at a $12.5 billion valuation, the largest sale of a North American professional sports team on record. (Forbes)

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Then, on Aug. 17, 2026, the Buss Family Trust secured the four of six sibling votes it needed to exercise a tag-along provision tied to Walter's sale, and sold the remaining 17.8% into the same transaction. Iger and Kushner move to roughly 83%, Patrick Soon-Shiong retains a minority position, and the deal still requires board of governors approval. (TheWrap, Silver Screen and Roll) Jeanie Buss will not continue as governor once it completes, because NBA guidelines require a controlling owner or governor to hold at least 15% of a franchise. (ESPN) In its statement, the family framed the decision as a chance to “exit gracefully while we still can.”

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The decision wasn't only financial. It was about preserving family dynamics and the Buss legacy, and the two numbers that actually decided the outcome weren't dollar figures at all.

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Why do family offices invest in sports teams?

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Because the returns have shown themselves to be excellent for more than one reason, and because the entry points have multiplied.

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Goldman Sachs found that 25% of family offices are already invested in sports and another 25% are interested, with 71% focused on men's major-league teams and 61% naming media and content as the main driver of future value.  That is half the surveyed universe either in or circling.

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The record book from the past eighteen months explains the enthusiasm. Beyond the Lakers, an investor group led by Vinod Khosla agreed to buy the Seattle Seahawks for $9.6 billion, and José E. Feliciano's family reached a deal to buy the San Diego Padres at $3.9 billion, a record for a controlling stake in baseball (Forbes). Feliciano is a Clearlake co-founder, but that purchase came off personal balance sheets rather than the fund, which is a distinction worth noticing (Dakota).

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Franchises are also no longer the only way in. Tom Dundon's family office partnered with an Apollo sports fund to put $225 million into Pickleball Inc., the parent of Major League Pickleball and the PPA Tour. (CNBC) Leagues, media assets, venues, ticketing platforms, and emerging sports all sit adjacent to the same demand curve, often at check sizes that a single family can write without a syndicate.

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What draws families specifically, as opposed to institutional capital, goes beyond the return. A franchise is a governance training ground for the next generation, a civic platform, and a shared project that survives the founder. That is also exactly why exits are harder than they look on paper.

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How family offices actually get in?

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Very few families buy a team outright. Most participate through a minority position, a syndicate, or an adjacent asset.

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League rules shape what is available. The NBA permits institutional investors to hold passive minority stakes, capped at 20% for a single fund and 30% of a franchise in aggregate, and the board of governors voted in December 2025 to raise the number of teams a single fund may hold from five to eight. (Clifford Chance, Sportico) Other leagues set their own ceilings, with the NFL approving a 10% cap per team and MLB permitting up to 15% per club. (Axios) A family office investing directly is not an institutional fund, but the same league approval process, transfer restrictions, and disclosure expectations apply to the position it buys.

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Three practical consequences follow. Passive means passive, so a minority holder should not assume influence over management. Every transfer runs through league approval, which lengthens any exit timeline. And the rights that come with the stake are whatever the shareholders' agreement says they are, not whatever the percentage feels like it should be worth.

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What does it mean to sell a stake in a sports team?

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Selling a stake is at least two different transactions with different consequences.

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A partial sale converts some economic interest to cash while the family remains in the ownership group. It is the standard route to liquidity on an illiquid holding. The family keeps a seat at the table, keeps the reporting obligations, and keeps whatever rights survive at the new percentage.

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A full exit ends the relationship. Cash arrives, and so does everything attached to no longer being an owner: the governance role, the access, roles held by family members, and the civic identity that came with the asset.

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The Buss transaction is instructive because it began as the first and became the second, and the family's own decision was only half the story. Their exit was made possible by someone else deciding to sell. That is what a tag-along right does. As Ropes & Gray describes it, tag-along rights let minority holders require the majority to procure an offer for the minority's shares on the same terms the majority negotiated, while drag-along rights run the other direction and let a selling majority compel the minority to join. (Ropes & Gray) Both are contractual, both live in a shareholders' agreement, and both mean the timing of a liquidity event may not belong to the family holding the stake.

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Why the percentage matters more than the valuation

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Back to those two numbers. The first was 15%, the league minimum for a governor. The second was four of six, the vote the Buss trust needed for its trustees to act. Once four siblings wanted out, the trust could sell, and once the trust sold below 15%, the seat went with the shares. A 2030 commitment written into a purchase agreement did not survive a threshold written into league rules.

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Ownership percentage tends to get treated as an input to a valuation. It is closer to a key. It unlocks or forecloses a board seat, a governor's seat, a consent right, a veto, a distribution preference, an information right. The dollar value of a stake is an output of a transaction that may not happen for years. The percentage, and the thresholds around it, is what the family is actually holding in the meantime.

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Three things matter here, whether the asset is a franchise, a stake in an operating company, or a co-investment in a stadium development.

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1. The percentage, with an effective date and a history. Dilution from a later raise, a redemption, a transfer between family entities, or a stake sold to an institutional fund all move it, and the attached rights move with it. A percentage with no history is a number nobody can audit.

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2. The thresholds attached to it. The league minimum for a governor. The vote count a trust needs to act. The percentage at which a consent right appears or disappears. These live in the league constitution, the shareholders' agreement, and the trust instrument, which is why the governing document belongs with the position rather than in a separate archive.

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3. Who else can start the clock. Tag-along and drag-along provisions, rights of first refusal, transfer restrictions, and lockups all determine whether liquidity is the family's to time. A family that knows its own percentage but not its co-owners' rights knows half of its position.

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The Padres sale was triggered by a governance issue and the question of control.

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The liquidity event after the sale

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Post-sale, the problems change.

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A family that held one anchor asset for decades suddenly holds cash at a scale that changes the whole allocation, and taxes need to be accounted for before any of it gets redeployed. It's a simple calculation: sale proceeds minus cost basis gives you the realized gain, which is then taxed at the appropriate rate. (IRS Topic no. 409) This is where MyFO's scenario modeling helps, estimating the gain, the tax payable, and the net after-tax proceeds before the decision gets made rather than after.

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Once the tax bill is accounted for, the real question is whether the proceeds get distributed to family members to manage individually, or stay in the family office to invest collectively. Either path raises the same follow-up questions: what governance sits around that decision, and what allocation benchmarks apply.

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Educational, not advice. The tax, league, and legal references above are summarized from current public sources for context. They are not tax or legal advice, treatment depends on facts and changes over time, and filing responsibility and legal determinations stay with the filer and their qualified professionals.

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How families hold this in MyFO

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We built MyFO with operators and family members side by side, and this category of holding is one of the reasons. A stake in a franchise, a fund, or an operating company is not a price. It is an entity, a percentage, a stack of documents, and a group of people with different rights, and most systems are built to hold only the first.

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In practice that means four things. The ownership graph models the trusts, holding companies, LLCs, and partnerships that sit between the family and the asset, with look-through to what is underneath. The document vault covers the full family library rather than investment statements alone, so a shareholders' agreement or trust instrument can sit with the entity and the position it governs.

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Questions to ask before the next stake purchase

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• What percentage would we hold, as of what date, and what dilutes it?
• Which rights are conditional on a minimum percentage, and where is that written?
• Who can force or trigger a sale of our position, and how much notice would we get?
• If a co-owner sells next year, do we tag along, get dragged along, or stay?
• What does league approval add to any exit timeline?
• Where will the governing document live, and would the person covering during a vacation find it?

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FAQ

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‍How does MyFO handle proceeds after a sale like this?

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Whether the family decides to distribute proceeds to individual members or keep them pooled at the family office, MyFO tracks the resulting entities and ownership either way. Once the family sets its own allocation benchmark, MyFO can hold that target next to the actual distribution and reinvestment activity as it happens, so the office can see how capital is being redeployed against the plan, and to which entities, rather than waiting on a quarterly reconciliation to find out.

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Can a family office hold stakes in more than one team?

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It depends on whether the family invests as an individual or through a fund vehicle, and on the league. League rules for institutional funds are explicit: the NBA now permits a single fund to hold passive minority stakes in as many as eight teams, capped at 20% each. (Sportico) Rules governing individuals and their own holding companies are separate, generally stricter about cross-ownership within a league, and applied case by case through the approval process, so this is a question for counsel and the league office before it is a portfolio question.

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Can a family be forced to sell alongside a majority owner?

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Yes, if the shareholders' agreement contains a drag-along right and the sale meets its trigger conditions, which are commonly tied to a threshold of voting stock and sometimes to a supermajority. (Ropes & Gray) The practical point is that a drag-along turns someone else's decision into your taxable event on a timetable you did not set. Read the notice period and the price protections before you need them.

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How should a family office carry an illiquid minority stake between transactions?

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Set a valuation policy before you need one, and record which reference you use and when it updates. Marks on private holdings tend to be event-driven, moving when a control transaction, a new round, or an independent valuation provides something defensible, and the gap between those events can run for years. What matters operationally is that the reference, its date, and its source sit with the position, so a board packet and a lender request pull the same number for the same reason.

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Why does a governance threshold matter more than a valuation to a minority holder?

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Because a valuation says what a stake is worth on sale, while a threshold determines what the stake does while it is held. A holder above the line may control appointments, block a transaction, or occupy a league seat. The same holder a few points below the line may have an economic interest and little else, at nearly the same price per point.

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Curious how MyFO would hold your entity structure, your ownership percentages, and the documents that govern them? Book a call with our team.

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