‘Basketball Team Sold for 12.5 Trillion Won’... Will Fan Loyalty Turn Lotte Giants Into an Investment Asset? [Weekend Money]

Lakers Set a New Record in Professional Sports History
Private Equity Funds Hold Stakes in One Out of Five Major U.S. Sports Teams
Broadcasting Rights, Advertising, and Ticket Sales Enable Predictable Cash Flow

Lotte Giants players. Photo by Yonhap News

LA Lakers, the iconic team in the National Basketball Association (NBA), has been sold for a record-breaking amount in professional sports history. On the 12th (local time), venture capitalist Joshua Kushner and former Walt Disney CEO Bob Iger agreed to acquire the Lakers for $12.5 billion (approximately 18 trillion won).

Just last year, the Lakers welcomed new owners at a company valuation of $10 billion, meaning the price has jumped by 25% in just over a year. Reuters described this deal as “an example that showcases the astonishing value surge of elite sports assets.”

This scene feels somewhat unfamiliar in South Korea. While private equity funds (PEF), major players in the mergers and acquisitions (M&A) market, have been acquiring manufacturing firms, car rental services, and restaurant companies, they rarely set their sights on professional sports teams. Why do deals common in the United States rarely occur in Korea?

The Los Angeles Lakers, a popular team in the National Basketball Association (NBA), were sold on the 12th (local time) for a record-breaking price in professional sports history of 12.5 billion dollars (approximately 18 trillion won). Photo by Reuters Yonhap News

Fans Don't Leave... Why Sports Teams Become 'Investment Assets'

Through the eyes of investors, sports teams have a unique “moat”: they are almost impossible to replicate or mass-produce in the short term.

No matter how much money one has, you cannot simply create a new NBA team. The league office strictly controls the number of franchises. Supply is limited, and fans rarely switch teams. If you dislike the iPhone, you can switch to a Galaxy, but even if the Boston Red Sox perform poorly for several years, you can’t expect their fans to become New York Yankees supporters.

Such loyalty and devotion can be monetized. Beyond ticket sales, teams generate multiple streams of revenue per fan: broadcasting rights, advertising and sponsorships, uniforms and merchandise, food and beverages, premium seats, and various types of content.

In a report published in March of last year, global accounting firm Deloitte analyzed, “Top-tier sports teams such as those in the NFL, NBA, and English Premier League (EPL) are attracting institutional investors and private equity funds, thanks to their global fan base, strong brands, and substantial media broadcasting revenues.”

The penetration of capital into the sports market is becoming faster and broader. In an October report last year, JP Morgan noted, “About one-fifth of teams in the four major U.S. professional sports leagues—NFL, NBA, MLB, and NHL—already have a certain level of private equity capital invested." It also added, "The total value of teams in the four major leagues is approaching $500 billion."

Even the NFL, once the most conservative, opened its doors in 2024. That August, NFL club owners changed the rules to allow private equity managers, upon approval, to hold up to 10% of individual team shares. The NFL described this as “the first time in league history that institutional capital has been allowed into team ownership structures.”

Korea Also Has Many Fans and Generates Revenue... The Difference Is 'Capitalization'

Korean fan loyalty stands up to the global standard. Moreover, in 2025, the KBO attracted more than 12 million spectators, setting a new record for attendance.

In the past, there was a strong perception that pro sports were “a business bound for losses without the support of major parent companies,” but now teams have begun to generate profits. In 2025, the total revenue of the 10 KBO teams reached approximately 779.6 billion won, an increase of 14% from the previous year, and half of the teams posted operating profits. The Lotte Giants recorded an operating profit of 16.56 billion won. Sales directly generated by fans, such as tickets and merchandise, are also increasing.

It is no longer reasonable to attribute the lack of large capital in Korean sports teams simply to an inability to make money. The real difference lies in how fan loyalty is converted into corporate value, and how that value is further transformed into a tradable asset.

There have been transactions involving sports teams in Korea as well. In 2021, Emart under Shinsegae Group acquired the SK Wyverns from SK Telecom for 135.2 billion won. This team is now the SSG Landers. Of this amount, 100 billion won was for team equity, and 35.2 billion won for related assets such as land and buildings.

On October 29, 2012, during the bottom of the 4th inning with one out and no runners on base in Game 4 of the 2012 Paldo Pro Baseball Korean Series between the SK Wyverns and Samsung Lions, Jae-Sang Park hit a solo home run and was greeted by his teammates.

However, the acquirer in this case was not a financial investor, but another major conglomerate. This relates closely to the history of Korean professional baseball, where team names such as Samsung Lions, LG Twins, and Lotte Giants are tied to their parent companies from the start. Instead of being independent investment assets, sports teams have grown into tools for promoting corporate brands and expanding touchpoints with consumers through public relations and marketing.

In this structure, the cash flows generated by the teams are blended with the advertising and brand value that the parent company receives. While the Lotte Giants provides enormous PR benefits to the Lotte Group, private equity funds find it difficult to simply count that as investment return.

Valuation and Acquisition Aren't the End... Ultimately, 'Can You Sell for a Higher Price?'

Investors ultimately make decisions based on the numbers. Team revenue and profit, broadcasting contracts, ticket and merchandise sales, and sponsorships are all calculated to predict future earnings and to gauge how much the business can grow after acquisition.

This process is relatively easier in the U.S. sports market. As teams are regularly traded, the market has established benchmarks such as “how many times revenue did a comparable team sell for?” According to Forbes’ 2025 survey, the average NBA team was valued at 12.9 times annual revenue. For MLB teams in 2026, the average was about 7 times revenue.

By contrast, in Korea, even complete team transactions such as the SK Wyverns deal are rare. At that time, the 100 billion won price for team equity was not revealed to have been calculated on the basis of any specific revenue multiple or discounted cash flow model. As such, there simply aren’t enough past transactions to establish a common market benchmark for “a fair price is X times revenue for a KBO team.”

The final stage, the “exit” (recovery of the investment), presents an even bigger challenge. Investors such as private equity funds typically expect to sell a business several years later at a higher price. With manufacturing firms, the exit might be a sale to a competitor or another fund, or a stock market listing. If you buy a baseball team, you must consider in advance who the next owner will be; but in Korea, the pool of potential buyers for teams is still thin, so exit routes are relatively limited.

In the U.S. and Europe, the time is approaching for early PE investors in sports markets to consider exits as well. Deloitte forecasts, “As initial sports PE investments mature, the ‘first wave of PE exits’—where investors actively consider sell-offs and equity restructurings—will begin.”

With South Korea’s sports market now growing rapidly, attention is turning to whether teams themselves could soon be valued purely as investment assets. As team revenue rises and direct fan-generated income becomes a larger share, efforts to evaluate teams as independent investment assets—rather than just PR tools for parent companies—may eventually accelerate.

Deloitte also stated, “Sport is evolving beyond the traditional ownership model into a dynamic, resilient, and attractive asset class offering diverse opportunities to investors worldwide.” It added, “For investors, the challenge will be to identify assets with long-term growth potential while managing risks in a balanced way.”

This content was produced with the assistance of AI translation services.