Arctos Makes Second Investment in 76ers, Devils at Higher Valuation
Arctos Sports Partners has purchased a larger stake in Harris Blitzer Sports & Entertainment, parent of the Philadelphia 76ers and New Jersey Devils, according to multiple people familiar with the matter.
The private equity fund first invested in HBSE, led by Josh Harris and David Blitzer, at a $3 billion valuation last year. This second investment came at a higher number, said the people, who were granted anonymity because the details are private. HBSE carries a topline valuation of $4 billion, the people said, though Arctos is paying less than that thanks to an LP discount.
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The deal has already been approved by the NBA and NHL, the people said.
The negotiations occurred as a Harris-led group (including Blitzer as a minority partner) negotiated its $6.05 billion purchase of the NFL’s Washington Commanders, the highest price ever paid for a U.S. sports team. That process dragged out due to concerns that the NFL had over some aspects of Harris’ financing plan, and Arctos increasing its position could provide valuable (and timely) liquidity for the HBSE owners.
It’s unclear how big Arctos’ combined stake will now be, though NBA and NHL rules prohibit funds from owning more than 20% of a single franchise. Representatives for Arctos and HBSE declined to comment.
This is not the first time Arctos has increased its position in a team shortly after making an initial investment. In 2021, for example, Arctos bought a 5% stake in the Golden State Warriors at a $5.5 billion valuation, then upped that to 13% eight months later. The group initially invested in the Tampa Bay Lightning that same year, and bought another stake earlier this year at a higher valuation, a deal that required a waiver from the NHL because it will put Arctos over the league’s 20% cap.
This stake is just the latest way in which Arctos’ and HBSE’s business intertwine. They have co-invested together in a number of outside funds and companies, and Arctos is also a backer of Elevate Sports Ventures, the data and consulting firm that HBSE co-founded.
Sportico values the 76ers at $3.21 billion, and the Devils at $825 million, so just over $4 billion. HBSE also includes a number of other sports properties and venues.
Every major U.S. league except the NFL now allows private equity funds to buy passive minority stakes in franchises. No firm has moved quicker into that opportunity than Arctos, which now has a piece of at least 20 different sports teams. They include the Chicago Cubs, Los Angeles Dodgers, Utah Jazz, Real Salt Lake and Boston Red Sox (through Fenway Sports).
Arctos recently disclosed assets of $6.64 billion, as of the end of 2022—a 69% increase from the year prior.
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