Want To Own A Piece Of The Phoenix Suns? This Former SPAC Owns A Stake, Could Own More NBA Stakes Soon

The Phoenix Suns are nearing an NBA Championship for the 2020-2021 season, which would be the first title in team history. The Suns are majority-owned by Robert Sarver, but investors can own a piece of the team via a company that went public with a SPAC merger and has plans to own stakes in several NBA teams.

What Happened: Dyal Capital Partners purchased a minority stake in the Phoenix Suns valuing the team at $1.55 billion according to Bloomberg.

Dyal’s stake is said to be less than 5% and may increase over time according to sources.

“We are excited that Dyal HomeCourt Partners has partnered with the Phoenix Suns to make its first minority investment,” NBA Chief Financial Officer J.B. Lockhart said. “We look forward to Dyal continuing to scale its platform with additional investments in our teams.”

Dyal landed a deal with the NBA last year to invest in multiple teams. The company expects valuations in NBA teams to rise in the future with strong media rights deals coming.

“We’re going to start with something like a 5% stake and look to grow it over time,” Dyal Capital Director Andrew Laurino said.

Dyal Capital went public with Owl Rock Capital Group through a SPAC merger earlier in 2021. The companies now trade as Blue Owl Capital Inc OWL. The company had $52.5 billion in assets under management as of March 31, 2021.

Related Link: How Much The Phoenix Suns And Milwaukee Bucks Are Worth 

Why It’s Important: Valuations on sports teams have risen along with teams seeing less revenue due to the pandemic, creating two possible reasons for teams to sell smaller stakes in large institutional investors.

Dyal can own as much as 20% of each NBA team according to Bloomberg.

Dyal’s HomeCourt business offers its investors diversified exposure to the NBA.

“If you bought a piece of a team even five years ago, or 10, 15 or 17 years ago, you’re sitting on a massive gain,” Dyal Capital’s Michael Rees said.

Dyal takes stakes in private equity firms and announced it was raising money in 2020 for the ownership stakes in NBA teams.

The NBA told teams last year that it could allow minority stakes from investment firms. Other sports leagues are becoming more positive on minority stakes from new investors.

“We’re grateful for the unanimous vote of the 30 team owners to give us this opportunity to be the only institutional investor eligible to pursue this strategy in partnership with the league,” Rees said.

NBA teams are valued in a range of $1.35 billion to $5.4 billion according to Sportico. Fourteen teams are valued at $2 billion or more and six teams are valued at $3 billion.

Publicly-traded Madison Square Garden Sports Corp MSGS owns the New York Knicks, which is the top-ranked team with a valuation of $5.42 billion.

OWL Price Action: OWL shares trade at $12.63 at the time of publication Friday. Shares have traded between $9.68 and $17.36 since going public.

Related link: Miss your favorite 'SPACs Attack'? Not a problem! Go to Benzinga's YouTube channel to view that show and others!