Inflation or not, the prices of professional sports teams continue to rise

Inflation will not hurt the finances of sports team owners.

It can actually help.

Although the ultra-rich will have to pay a little more for their eggs at the grocery store—just like everyone else—inflation is unlikely to affect the bottom lines of their sports properties.

“I rest pretty easy if I’m an owner,” said Tim Clark, a senior analyst at PitchBook who researches private financial markets. “This is how people view the assets of the professional sports industry. They just won’t go down.”

Inflation has soared this year to levels not seen in four decades, slowing the economy and raising prices for consumers from the till to the gas pump. For the most part, sports are no exception: rising costs make attending games more expensive for fansfor families who participate in youth sports and for college athletic departments trying to stay on budget.

But millionaires and billionaires who own a sports team won’t feel stymied, whether it’s the day-to-day costs of running the business or the sale price when they decide to move on. On the contrary: a franchise can be a safe place to park money and ride out a bear market.

“I really think there is some hedging,” said Inner Circle Sports CEO Rob Tillis, who has worked on the sale of dozens of teams in all four major U.S. professional sports and the top international leagues. “I’ve been doing this for 30 years. We’ve been through many business cycles and valuations have been strong. Now I don’t see it as anything different.”

Most sports owners are also well capitalized enough to keep their team budgets separate from their outside businesses and other sources of wealth. So while rising interest rates have cooled the housing market, it’s unlikely to affect Cleveland Cavaliers and Rocket Mortgage owner Dan Gilbert, who, with an estimated net worth of nearly $52 billion, is the 23rd richest person in the world, according to a magazine Forbes.

(One exception: Losses in Bernard Madoff’s Ponzi scheme reduced the Mets’ payroll and forced owner Fred Wilpon to sell first part and then the rest of the team.)

“These guys have so much money that I think if they start squeezing it elsewhere, it’s more or less a rounding error for their clubs,” said Tom Pitts, European head of LionRock Capital, a private equity firm that has a third interest in the football team Inter Milan. “Most of these guys haven’t tried to buy the club. It’s an expensive hobby.”

Rising interest rates could make it more expensive for prospective owners to buy into the club if they have to borrow money to pay for their new prize. “It just costs a lot more money in absolute dollars to service the debt,” Pitts said.

There are a handful of high-profile teams on the market right now.

Washington Commanders owner Dan Snyder, under pressure to sell his team after an investigation revealed a toxic corporate culture, says he would consider offloading all or part of the once-proud NFL franchise. It is expected to bring in even more than the $4.65 billion paid for the Denver Broncos this summer by Walmart heir Rob Walton, who, with an estimated net worth of $61 billion, is the 16th richest person in the world.

Robert Sarver put his teams, the NBA’s Phoenix Suns and the WNBA’s Phoenix Mercury, on the market after an investigation found evidence of a racially and sexually insensitive workplace. Baseball’s Washington Nationals are for sale, and the family that owns the Baltimore Orioles has also made noise about the sale. The NHL’s Ottawa Senators can also be had at the right price.

Two of the biggest names in English football, Manchester United and Liverpool, are also in the market. Man U. was valued by Forbes in September at $4.6 billion — slightly higher than Liverpool; Both are expected to eclipse the $3.2 billion price paid for Chelsea this spring, which was briefly the highest for a sports team.

That record was less than two weeks old when the Broncos deal was announced.

“You have people like the Waltons and that’s a drop in the bucket,” Clark said. “This is a club. It’s like “When will the next Picasso be sold?” … The value sector has nothing to do with the economy. There is always demand and there is always scarce supply.

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AP sports writer Jay Cohen contributed to this story.

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