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Report: Golden State Warriors valued at US$5.5bn as Arctos buys minority stake

Private equity firm agrees deal for approximately five per cent of NBA franchise.

6 April 2021 Ed Dixon
  • Acquisition set to be first private equity investment in an NBA team since the league relaxed rules on institutional investors
  • NBA initially approved Dyal Capital Partners to buy minority stakes last year
  • Warriors worth US$5.21bn, according to Sportico rankings, making them the second most valuable team in the league

Private equity firm Arctos Sports Partners is purchasing approximately five per cent of the Golden State Warriors in a deal that values the National Basketball Association (NBA) franchise at US$5.5 billion, according to Sportico.

The acquisition is set to be the first private equity investment in an NBA team since the league relaxed its ownership rules to allow institutional investors. Last May, the league reportedly approved Dyal Capital Partners, a division of US investment management company Neuberger Berman, to buy minority stakes in franchises.

The league is believed to be changing its stance due to soaring franchise valuations, which have made it difficult for minority owners to sell their shares. According to Sportico’s valuations, the average NBA franchise is now worth nearly US$2.4 billion.

Sportico initially reported in January that Arctos was eyeing minority stakes in several NBA franchises. The company, which is co-led by former Madison Square Garden (MSG) chief executive Doc O’Connor, reportedly had about US$1 billion in assets under management as of February.

In the same month, Arctos also created a new special purpose acquisition company (SPAC) that is aiming to raise US$275 million to invest in a sports property or sports-adjacent business. Theo Epstein, who had first joined Arctos as executive-in-residence, is the SPAC’s chief executive.

The Warriors, meanwhile, were linked with selling a five per cent stake in February. According to the New York Post, a group of unidentified owners were hoping to sell their stake in the team for US$200 million as part of an auction that had already begun.

At the time, the New York Post reported that the transaction price would value the Warriors at US$5 billion when factoring in their US$800 million in debt. An anonymous sports banker told the newspaper that the franchise’s true valuation was more likely to be ‘about US$4.4 billion’, citing the impact of Covid-19 on revenues.

At the start of the year, Sportico valued the Warriors at US$5.21 billion, second in the NBA only to the New York Knicks at US$5.42 billion.

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