With multi-millionaires and billionaires spending huge amounts on sports teams in the US and overseas, this has become a significant banking opportunity. We talk to Citi Wealth, part of Citigroup, and its head of sports finance.

The thrill of watching sports can take some fans to the point where, if their pockets are deep enough, they’ll buy a sports franchise. 

While not all enjoy the rising amount of money in professional sports, it is undeniably a strong trend. Banks and wealth managers see this area as a specialism worth cultivating. 

At Citi Wealth, part of Citigroup, the US lender has developed a sports finance group that taps into the need for advice and financial support in buying and selling teams. Family Wealth Report recently spoke to Ivo Voynov (pictured), head of sports finance at Citi Wealth, about this business. Citigroup has $1.7 billion in loans to US sports teams and leagues.

Ivo Voynov

The Citi model is to keep as much of this work in advising and lending to sports team owners/potential owners as in-house as possible. The focus on areas such as sports teams is part of the group's policy of building deeper and wider relationship with clients, he said. 

The private bank at Citigroup covers about 25 per cent of the world’s billionaires. And billionaires “like this area” of sport, Voynov said when FWR met him at the bank’s office in New York City.

One important reason why UHNW individuals want to get into the sports team business is that it diversifies their wealth, he said. “The sector has outperformed the broader stock market.”

Voynov and his colleagues help individuals – and family offices – with tasks such as fundraising to build a new stadium, buy a team and players, and marketing and investment. Citi has deep expertise in the economics of sports, for example the dynamics of different leagues, the role of the media, the historical brand value of teams and how this can be protected, he said. 

Before coming to Citigroup in September 2022, Voynov worked for more than three years at JP Morgan, in New York; prior to that he was at Houlihan Lokey, advising technology, media and telecom firms on M&A capital raising and other tasks and; before that, he worked in the TMT space for Rothschild & Co in New York.

Experience
The US bank has been in this sports-related area for 25 years, providing consultative advice, liquidity solutions, and investment opportunities. It offers team and league-level financing for acquisition, general corporate and working capital needs, as well as the construction and renovation of stadiums and arenas. On the treasury management side, it can help on regular finance operations, arena concessions, ticketing and payroll benefits, foundation and community needs. The idea, in sum, is to provide all ends of the sports financial package under one roof. It’s an example, in a way, of the “one bank” model in action.

For the wealth management industry in general, the business of sports teams, as well as the individual financial affairs of sportsmen and women, has become a distinct – and large – specialism. For example, the Rockefeller Global Family Office has experts who look after athletes and entertainers. Other firms that have expertise in and around sports include Carnegie Private Wealth, for example, and Merrill Lynch Management. In the UK, the private banking group Coutts has a sports, media and entertainment division for its wealthy clients. Standard Chartered, the UK-listed bank with a significant presence in Asia, has launched a new alternative fund focused on sports for ultra-high net worth and high net worth clients under its Global Private Bank.

It is unsurprising that banks such as Citibank want a slice of the action. According to a 2024 guide to "trophy assets" by Taylor Wessing Private Wealth, the world's 50 most valuable sports teams were worth a total of $256 billion, as of 2023.

There is also a kind of “soft power” of getting involved in sports – banks can use connections to tie up sponsorship deals, arrange for key clients to get tickets to popular events, and use some of the sports vibe to encourage a competitive ethos among staff. Sports owners can become even more famous – assuming that is their ambition – by using that renown to plug their other businesses. There are also former sports professionals working in the industry. For example, James Beale, a former hockey player, is development director for Rockefeller Capital Management’s Rockefeller Global Family Office. He runs the Sports and Entertainment group and recently spoke to FWR (an interview article is forthcoming).

Owners at home and abroad
Within the ranks of those making money in Wall Street and other walks of life, there are plenty of UHNW individuals who’ve bought into sports. Steve Cohen, chairman and CEO of the hedge fund firm, Point72, owns the New York Mets; Josh Harris, co-founder of Apollo Global Management, led the group that bought the Washington Commanders, while David Blitzer, chairman of Blackstone’s tactical opportunities division, owns stakes in the Philadelphia 76ers and the New Jersey Devils. Dan Gilbert, who made his money in financial services, bought the Cleveland Cavaliers for $375 million in 2005. He operates the Rocket Arena in Cleveland, Ohio. A group including Man Capital, the London-based, family office of entrepreneur Mohamed Mansour, bought a new team in San Diego that competes in Major League Soccer.

American investment firms have also widened their horizons by buying into foreign sports teams. The English soccer world has been a big area. For example, Liverpool Football Club is owned by Fenway Sports Group (FSG). The principal owner of FSG is John W Henry, who is also the principal owner of Liverpool. Before FSG came along, the UK football team – one of the most successful in the country’s history – was owned by US businessmen George Gillett and Tom Hicks. In another case, back in April 2021, Gamechanger 20 Limited, with US ties, bought Ipswich Town, a soccer team in the east of the UK. Subsequently, Bright Path Sports Partners, a US private equity firm, obtained a 40 per cent stake in it, cutting ORG's (majority shareholder) stake to 50 per cent. 

Rather less happily, the Glazer family that bought Manchester United in 2005 did so in a leveraged deal that put pressure on the “Red Devils” – as the English team is known – and allegedly hobbled its ability to compete in a sustainable way. When it comes to owning teams, there are reputational issues. Owning a sports team can be an emotional business.

Synergies
Citi Wealth’s Voynov said the sports advisory area he operates in has synergies with the rest of the wealth management platform at the bank. 

FWR asked Voynov how conversations about owning a sports team typically start.

“It varies, some people have a strong preference for a specific league, market, team; others take a broader view based on where they perceive they can find value and use prior business experience and networks to generate return on investment. Some people like to be in control positions, others like to start with a minority stake and learn the business and operations side before they make a full commitment,” he said. 

“There is a big focus on increasing franchise value,” Voynov said. In the US – in an almost “socialist” way – revenues in a league are distributed across the teams; this can ensure owners’ teams have to be competitive. 

Another big issue is monetization of intellectual property through brands and trademarks. Today, in the age of social media, team owners have to be agnostic about the channels they use to engage with fans and other parties, Voynov said. 

Voynov noted that investment in sports teams and leagues rose, rather than suffered, during the pandemic. People such as Steven Cohen (as mentioned above) saw through the noise to understand the value of putting money into the club. 

“Investors looked through the cycle; no team went bankrupt,” Voynov said. 

Valuations
FWR asked Voynov how teams are valued. 

“Sports teams are valued using a multiple of revenue metric; US professional sports teams are valued at higher multiples compared to European soccer as an example due to strong league governance, closed league format (no relegation) and collective bargaining agreements with player unions that provide cost visibility and certainty,” he said.

High valuations are a big driver in sports rights and the market for premium sports properties (such as the four main US sports leagues), as illustrated by media contracts renewals by NBA and NHL (in Canada). 

“Both leagues were able to get 2.5 times or more increases in rights payments over prior contracts. Further, in the US there is a scarcity value element as leagues have a limited number of teams that are available for sale at any given time. Finally, the entrance of institutional capital in the sector has provided an outside validation of valuation levels in the sector,” he said. 

Finally, FWR had to ask Voynov about his own sporting allegiance. 

“I have always been a huge Juventus fan; I grew up watching Baggio and Del Piero and admiring their creativity and mastery with the ball,” he said.