You may have come across the recent news of the Buss family selling the Los Angeles Lakers in June 2025 for an eyewatering $10 billion, which is the highest sale price ever for a professional sports team.
The dazzle of “exclusive” private investments, such as investing in pro sports teams, has been luring in billionaires and ultra-wealthy investors for decades. However, over the last decade, adoption of private investments by average investors has risen substantially. Among other factors, the broader adoption has been driven largely by investors’ relentless quest for superior returns.
Considering the Buss family invested $49.5 million to acquire the Lakers in 1979, the return on investment is certainly nothing to scoff at. At the surface, it may even appear to be an outsized return that an average investor could not have achieved.
So the question is – could any investor have generated the same, or an even better, return by investing in public stocks over the same period?
“Exclusive” is Not Equal to Superior
As a package deal in May 1979, Jerry Buss purchased the Lakers, the Forum arena, the Kings, and a 13,000-acre ranch in the Sierra Nevada mountains for $67.5 million. Estimates indicate the $67.5M purchase price was made up of:
Los Angeles Lakers: $16 million
The Forum arena: $33.5 million
Los Angeles Kings: $8 million
The ranch: $10 million
Since the Kings and the ranch were not part of the recent $10 billion sale, the estimated purchase price for the Lakers is $49.5 million.
Over the 46 years of ownership, the Lakers investment generated a 20,102% total return. On an annualized basis, this equates to 12.2% per year. Alternatively, if the Buss family had invested $49.5 million in the S&P 500 over the same time period, it would have been worth $10.1 billion in June 2025 - roughly the same return the Lakers generated.
While the S&P 500 is a popular U.S. stock market gauge, it is designed to capture the largest 500 companies in the U.S. stock market and gives higher weighting to the largest of companies in the index.
Looking beyond just the S&P 500, if the Buss family had invested only in U.S. large-cap stocks with strong balance sheets, good profits, and attractive prices, the $49.5 million investment would have grown to a whopping $56.5 billion! Annualized, this represents 16.5% per year.
While these outcomes may be contrary to what many investors would have expected, the Lakers are just one example in the pro sports world.
Outlier, or Part of a Broader Trend?
Leveraging public data and analysis conducted by Avantis, only a few teams from the sample below have not generated a better return on investment than the S&P 500 since their most recent owners acquired them.
Yet, the story is very different if the investment was in large-cap stocks with low price multiples and high profits.
While regular dividends to owners of professional sports teams are not common, it is possible the owners of these teams do receive some amount of dividends. However, due to lack of public data on that we assume no dividends were received. Even if dividends were present, it is unlikely their inclusion would be enough to result in outperformance over high-quality public stocks with attractive valuations.
Conclusion
To be clear, we are not implying that pro sports teams or other private investments are poor investments. Rather, the point is that depending on your circumstances and objectives, the opportunity provided by public markets may be all you need to reach your goals.
It is important to recognize that private investments typically come with other characteristics that are not usually mentioned in flashy stories about big paydays. Just because a once inaccessible private investment may become accessible, it does not mean it is destined to generate a superior long-term outcome.
Much like championship teams are not built on highlights alone, enduring wealth is not built on chasing flashy or exclusive investments.
Footnotes
[1] Research by Fama & French (1992, 1993) demonstrates that stocks with high book-to-market ratios significantly outperformed stocks with low book-to-market ratios over the long term.
Disclosure
RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. This article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.