The business behind soaring sports franchise values

What makes a sports franchise worth $12.5 billion?

The latest sale of the Los Angeles Lakers offers a timely example of a shift Wharton emeritus professor Kenneth Shropshire has watched unfold for decades: Sports franchises are increasingly being viewed not simply as teams, but as an asset class.

Shropshire joined Wharton dean Erika James for the latest installment of our "What I've Learned" series, featuring interviews with Wharton faculty who have made a lasting impact in their fields.

During the conversation, recorded before the Lakers deal was announced, Shropshire pointed to earlier blockbuster purchases as signals of what was coming.

As franchise values rise and more sophisticated capital enters the industry, sports organizations are becoming increasingly complex businesses, creating opportunities to apply technology, management expertise, analytics, and investment in ways that can generate value well beyond wins and losses.

That perspective has new resonance in Los Angeles, where the Lakers are changing hands at a reported $12.5 billion valuation – $2.5 billion higher than the valuation attached to the team's previous sale roughly a year ago.

Watch Shropshire and James discuss what's driving the growing business of sports and much more: https://whr.tn/4xc4kit

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