In 1966 Bill Russell became the first black head coach in the NBA. As the reigning King of NBA championships with 11 total (2 championships as player/coach), even he couldn’t foresee the shift in the sports economy that would make modern day athletes some of the most affluent beings on the planet. Since 1990, there are at least 20 current players or hall of famers (more than 13 of them of African descent) that are either majority or minority owners of professional sports franchises.
This market isn’t limited to household names in America’s 4 major sports, such as Lebron James (minority owner of the Boston Red Sox and minority owner of Liverpool FC) and Michael Jordan (Majority owner, Charlotte Hornets). Players in sports that traditionally earn less per appearance and endorsements have also been able to turn their earnings into smart investments.
This may not seem like a huge feat when you consider that the average professional athlete in America’s 4 major sports earns around $2.73 million per year. However, if we calculate the amount of sweat equity it takes for a pro athlete to earn enough to buy into a franchise, vs. the millions accumulated by the average team owner in the same time period, it is clear that an unfair number of professional athletes will never come close to generating the wealth necessary for ownership.
In the year 2000, Venus Williams won her first Wimbledon title. That same year, Mark Cuban, (then a newly made billionaire), acquired the NBA’s Dallas Mavericks franchise for roughly $280 million. The combined earnings of Venus and Serena allowed the sisters to purchase small shares in the NFL’s Miami Dolphins in 2009. By that time, both had been professional tennis players for 15 and 14 years (respectively).
In 2021, Mark Cuban’s estimated net worth is $4.4 billion. As of 2021, Venus Williams’, estimated net worth stands at $94 million, while her sister Serena, (the only women’s tennis player to earn more prize money as a professional), has an estimated net worth of $240 million (largely due to her off court investments and endorsement deals).
So, what does it take to own a sports franchise? That depends on several factors including the sport you are investing in, the long-term popularity of the franchise you are buying and, in some cases, the background of the ownership group.
The value of sports in America as a source of entertainment has become a cash cow for the owners. Unlike most investments, buying into a medium or large market sports franchise is a win-win that can nearly double the owners net worth. Perhaps, that’s the real reason why the potential ownership group led by Sean “P. Diddy” Combs, Steph Curry and Colin Kaepernick failed to acquire the Carolina Panthers (NFL franchise).
“We can’t have the inmates running the prison.” (Bob McNair, current owner of the Texas Texans
The unfortunate truth is that many in society are uncomfortable with the idea of persons of color, not only having political power, but financial power and the authority to use it as they please. In particular, the Carolina Panthers potential ownership group had an immense potential to shift the culture of America both on the field and off it. That may have been too heavy for the NFL’s current group of owners that feel, “We can’t have the inmates running the prison.” (Bob McNair, current owner of the Texas Texans, Washington Post)
The time has come for a change. What former players like Michael Jordan and Warrick Dunn have started, current players like Lebron James and Patrick Mahomes carry on. Professional athletes can now aspire to have leadership positions in the sports that helped them gain notoriety and wealth. Having a position in ownership means, they will be able to provide necessary changes in their front offices and on the field that can change how athletes are treated in the future. With that said, congrats to Giannis Antetokounmpo and Dwayne Wade, for becoming minority owners of the Milwaukee Brewers and Utah Jazz (respectively). Your desire to lead as an entrepreneur and competitor reminds us that your work does not end when the ball stops dribbling.
If you could own a sports team, which one would it be and why? Drop a line and let us know.