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Joe Tsai saw a prime opportunity when he agreed to purchase a minority stake of the Brooklyn Nets from Mikhail Prokhorov in 2017. The franchise had a sales price of $2.3 billion at the time of the deal. Tsai gained full ownership of the team in 2019, and its value has since skyrocketed to north of $5 billion.
During that time, Tsai and his wife, Clara Wu, also bought the WNBA’s New York Liberty for an estimated price between $10 million and $14 million. They recently sold shares of the team at a valuation of $450 million, a record for a women’s sports franchise.
Tsai recently opened up on his success investing in pro sports teams and the strategy behind it.
“Soaring team values is a phenomenon in the top-tier leagues like NFL and NBA,” he told NetsDaily. “These franchises trade like art – valuation is based on supply and demand as opposed to profits or cash flow. Demand far outstrips supply, and supply is strictly controlled and limited (that’s why they’re called ‘franchises’). The cachet of owning a team in a top league is always attractive to people who can afford it… My sports investment philosophy: Invest in leagues where the best players in the world play – e.g, NBA, WNBA, NFL.”
While Tsai’s sports empire began in basketball, he’s expanding his reach to other sports.
The Taiwanese billionaire business magnate recently purchased a 3% stake in the Miami Dolphins at a price estimated at more than $200 million.
“Investment in the Miami Dolphins is an easy financial decision,” Joe Tsai told NetsDaily. “Steve Ross put together a terrific group of assets – NFL (massive TV contract), Hardrock Stadium (Taylor Swift concerts), Miami Formula 1, Miami Open tennis tournament – and he has a great management team.”
Tsai recently sold 15 percent of BSE Global, the Nets’ parent company, to members of the Koch Family. However, there’s no indication that the Nets owner will exit the sports realm anytime soon. His investment in the Liberty and Dolphins indicates the opposite.
Like many owners, Tsai’s investments in pro sports teams go beyond the court or field. Barclays Center operates as a year-round event venue. Meanwhile, the Dolphins’ ownership group controls assets like Hard Rock Stadium and a Formula 1 circuit. The group also bought a minority stake in the Miami Open, a premier tennis event.
“Our professional sports began as vehicles to sell beer,” said Mark Rosentraub, Professor of Sports Management at the University of Michigan. “That’s what’s professionalized the Cincinnati Red Stockings. Every time player salaries rose for any number of factors, owners always try to leverage sports for other things. So we went into advertising first. That was the outfield, the advertising on the walls. Then we went into radio, then to television. And what owners are doing now is, again, adapting or leveraging sport for other activities to generate income. It’s just simply...
