Blue Owl Acquires Stake in Cleveland Cavaliers

Blue Owl Capital Corp. announced Monday that it will acquire a minority equity stake in the Cleveland Cavaliers and its accompanying assets, marking the asset manager’s sixth investment in a National Basketball Association team. The investment—made through the Blue Owl HomeCourt Partners’ Fund, a division of Blue Owl’s GP Strategic Capital platform—will accompany the firm’s stakes in the Minnesota Timberwolves, Charlotte Hornets, Atlanta Hawks, Sacramento Kings and Phoenix Suns. The Cavaliers have been majority owned by Dan Gilbert, the chair of Rocket Mortgage LLC, since 2005. The Cavaliers ranked 15th out of 30 teams in Forbes’ January ranking of the most valuable NBA teams at $4.8 billion, with revenue of $440 million and operating income of $127 million. Phoenix (11th, $5.425 billion) and Atlanta (14th, $5.0 billion) are the two franchises in which Blue Owl holds stakes that ranked higher. HomeCourt was formed in 2020, in partnership with the NBA, to provide institutional capital. The NBA allows private equity firms to hold minority stakes of up to 20% in a team, with eligible firms allowed to own stakes in as many as eight teams. “Sports investing is a rapidly growing alternative investment strategy due to the diversification and stable income stream it can potentially provide investors,” said Blue Owl Co-President Michael Rees in a statement. “Blue Owl HomeCourt Partners was one of the first strategies to recognize this opportunity and create a vehicle to bring this unique exposure to investors.” Several asset managers have launched their own sports investing platforms to gain exposure to the sector. Firms such as Apollo Global Management, Ares Management and Arctos Partners—now owned by KKR—are actively investing across franchises and subsectors of professional sports leagues. Tags: Blue Owl Capital Inc., sports