According to an internal memo which was obtained by Bloomberg, the National Basketball League is considering implementing a new way for investors to acquire minority stakes in teams within the league.
With values of franchises in the league skyrocketing, the NBA is exploring the possibility of forming a “new capital vehicle that could purchase passive, minority ownership interests across multiple NBA teams.”
Though details about how the potential program would work, the vehicle “would provide additional liquidity for the sale of team ownership interests, including by providing access to a new pool of long-term investors that do not currently have access to team ownership opportunities,” according to the memo.
Presumably, the vehicle would allow limited partners with a way to sell some or all of their holdings to interested parties in an easy manner. Currently, it can be tough for limited partners to unload their stakes because they don’t come with much power or come with a board seat.
How much or little the vehicle could acquire from any team were not included in the memo.
The formation of the new capital vehicle is set to be a topic of discussion at the upcoming owners meeting in New York later this month.
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