First-of-its-kind partnership provides authoritative benchmark for measuring North American sports franchise market
Dallas and Ann Arbor, Michigan, June 4, 2024–(BUSINESS WIRE)–The University of Michigan's Stephen M. Ross School of Business, in collaboration with private investment firm Arktos, is pleased to launch the Los Arktos Sports Franchise Index, which serves as a tool to assess the overall value and performance of North American sports franchises comprising Major League Baseball, the National Basketball Association (NBA), the National Football League (NFL) and the National Hockey League (NHL).
The Ross-Arctos Sports Franchise Index was conceived by Arktos and Danny Silman, CEO of Relevant Sports Group and business partner of Stephen Ross, and is supported by a proprietary data set of hundreds of individual managed and unmanaged transactions in the “Big Four” leagues since 1960 to estimate a time series of average revenue. Combining Arktos' deep industry insight and applied research with Michigan Ross' academic excellence and integrity, the index will provide critical insights and analysis to potential investors as well as the broader finance and sports business community. Additionally, the Ross-Arctos partnership will foster academic research and thought leadership on all aspects of sports business operations for the benefit of students and faculty.
“We are excited to partner with the Arktos team, building on Arktos' unique, market-leading presence in the professional sports investment business,” said Sharon Matusik, dean of the Edward J. Frey School of Business at the University of Michigan. “Our shared goal is to establish such an index, combining Arktos' industry knowledge and experience with Michigan Ross' deep analytical capabilities and academic rigor.”
Founded in 2019, Arctos was founded with the goal of bringing more than capital to the teams, leagues and companies it partners with. By combining data science-backed insights with deep operational and domain expertise, Arctos has quickly emerged as a catalyst for innovation in professional sports and the private market.
“Unlike other private asset classes, the professional sports sector has lacked a shared, consistent and systematic measure to benchmark performance across the asset class, the performance of each league and the performance of individual investors. This index marks an important milestone for institutional investing in the sports asset class and the culmination of our team's continued hard work and data-centric approach,” said Ian Charles, co-founder and co-managing partner at Arctos. “We are proud to partner with the University of Michigan Ross School of Business, whose academic excellence and leadership in finance and sports business made them the ideal partner for this endeavor.”
“Stephen Ross is one of the most creative and forward-thinking people in global sports,” said Silman. “It is exciting and appropriate that this innovation, which will have a profound impact on our industry, will be brought to life at the Ross School of Business.”
This month, Michigan Ross University launched a new website that includes sports franchise performance trends and research data. In addition, the website will feature key insights from several Ross faculty members, including Chris Ryder and Clay Miller. Ryder and Miller have expertise in entrepreneurship and private equity, respectively.
“We believe the Los Arktos Sports Franchise Index will substantially shed light on the risks and uncover the unique opportunities associated with investing in professional sports franchises,” said Clay Miller, dean of the index at Michigan Ross University. “We believe the index fills this gap by providing a more granular analysis of the risks and rewards of professional sports investing than existing methodologies.”
Notable findings from the Ross-Arctos Sports Franchise Index include:
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The value of North American sports assets included in the index has grown at a compound annual rate of 13.0% over the past 60 years, outperforming the stock market by 2.5%.
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According to several risk measures, the North American sports assets included in the index have superior risk/return characteristics compared to other traditional and alternative asset classes.
Additionally, notable updates as of our first quarterly report on this index (as of Q1 2024) include:
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North American sports assets included in the index have returned 4.8% quarter-to-date, 28.1% year-to-date and 16.7% over the past three years.
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Year-over-year, North American sports assets outperformed global equities (23.8%), U.S. small caps (19.7%), private credit (8.8%), private equity (6.0%), commodities (1.5%) and fixed income (1.3%).
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Year-over-year, the U.S. media and entertainment sector (53.6%) and U.S. equities (29.9%) outperformed North American sports assets included in the index.
For more information about the partnership, visit michiganross.umich.edu/rasfi
About Arktos
Arctos is a private investment firm providing customized growth and liquidity solutions, differentiated thought partnerships, and value creation advice to sports franchises (Arctos Sports) and alternative asset managers, their funds, and portfolio companies (Arctos Keystone). Founded in 2019, Arctos serves as a catalyst for innovation and business transformation for its portfolio companies and their markets. The firm's unique approach is supported by Arctos Insights, a proprietary quantitative research and data science platform. Arctos has a team of 50+ investment and operations professionals with investment and operations expertise across industries, geographies, and economic cycles. The firm is headquartered in Dallas with offices in New York and London. For more information, please visit www.arctospartners.com or the Arctos company page on LinkedIn.
About the University of Michigan Stephen M. Ross School of Business
The Stephen M. Ross School of Business at the University of Michigan is a diverse learning community founded on the idea that business can be a great vehicle for positive change in today's dynamic global economy. The mission of the Ross School of Business is to build a better world through business. Through their thought and action, members of the Ross community drive change and innovation that improves business and society.
Michigan Ross is consistently ranked among the world's top business schools. Degree programs include the Bachelor of Business Administration, Full-time MBA, Part-time MBA (online and weekend formats), Executive MBA, Master of Accountancy, Master of Business Analytics, Master of Business Administration, Master of Supply Chain Management and PhD. In addition, the school offers individualized and custom executive education programs targeted at general management, leadership development and strategic human resource management. For more information, visit MichiganRoss.umich.edu.
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