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STEP-BY-STEP GUIDE TO PURCHASING A SPORTS TEAM
STEP- BY- STEP GUIDE TO PURCHASING A SPORTS TEAM

By Rebecca Meneray | February 7, 2017

Reading Time: 3 minutes

While this process may appear on the surface as neing complex and multi-facted, the Cosmos staff has broken it down into a step-by-step guide. While this scratches the surface of all the intricacies associated with purchasing a team, it does highlight some of the most important considerations in the process including financial assessment, marketability analysis, as well as understanding the rules/regulations that should be followed. In addition, while it is understood that there is a number of these steps that can be executed without substantial assistance, the speed and thoroughness of the process is typically benefited by 3rd party input and direction.  

1. DETERMINE WHICH TEAM YOU WANT TO PURCHASE
  • Should not necessarily be a team you are a big fan of, as passion for a particular team may impact/influence sound decision-making process.
  • Exhaustive research should be completed throughout several teams, leagues, and locales and should not be restricted to your immediate area or region.
2. SOURCE A LIST OF TEAMS/FRANCHISES ACTIVELY SEEKING OUT NEW OWNERSHIP
  • Enlisting assistance of an established marketing firm may accelerate this process.
  • 3rd party sourcing may also provide a list with otherwise private information.
  • Keep this list up-to-date as you continue through the process, the dynamic nature of this list will allow you to consider all options as they become available.
3. CONDUCT COMPREHENSIVE MARKET RESEARCH
  • Conduct a thorough review/assessment of the team’s existing fan base.
  • Assess comparable properties in the vicinity and their capacity to compete for fans.
  • Analyze key market segments in the area (i.e. potential targets for groups).
4. CONFER WITH RULES & REGULATIONS ASSOCIATED WITH TEAM OWNERSHIP/TRANSFER OF OWNERSHIP FOR THE TEAM
  • Familiarize with league/team regulations regarding ownership transfer.
  • Ensure all regulations can and will be followed should a purchase move forward.
  • Confer with all implicated parties including facility owners, stakeholders, etc.
5. CONDUCT COMPREHENSIVE FINANCIAL ASSESSMENT
  • Understand the up-front financial implications — complete cost-benefit analysis.
  • Develop revenue generation strategy (ticket sales, ancillary, sponsorship, etc.)
  • Calculate a realistic timeline for investment recovery.
  • Utilizing pre-existing data, determine the long-term sustainability of the team.
6. SECURE CAPITAL NECESSARY TO ACQUIRE AND SUSTAIN THE TEAM

If funds are readily accessible and the above steps have been completed, then move forward with legal transfer of ownership processes.

If additional funds are required, find potential co-owners to participate in an ownership buy.

Even with all these considerations being taken under advisement, there are still 3 important things to keep in mind as you move towards your investment:

WITH LIMITED AVAILABILITY COMES FIERCE COMPETITION

Particularly amongst the most well-known, there will be a restrictive number of options for buyers at any given moment. Thus, anyone engaged in the process must be prepared to act quickly and be willing/able to navigate substantial competition (particularly in the financial arena).

RESPECT THE PROCESS

This speaks primarily in regards to rules/regulations about team ownership. These factors often come into play early on in the process (i.e. transfer of ownership policies) and therefore must be understood in full prior to any action being taken. It is certainly not ideal to engage in the process only to get held up by red tape right before you close the deal. Remember, the league and its policies are as much a part of the process as you and the team you’re seeking to purchase!

buying more than a team

On the surface, purchasing a team may draw parallels to simply buying any other type of business. However, it is crucial to recognize that sports teams are a unique beast, often filled with history and pride. Ultimately, it should be perceived as a buy-in to not just the sport itself, but the fans, the sponsors, the athletes, the community and more. To purchase a team is to demonstrate your belief in its viability and success that can only occur as a result of stakeholders both big and small.

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