Peter Mallouk, the billionaire CEO of Creative Planning, recently acquired a majority stake in Major League Soccer’s Sporting Kansas City at a valuation of roughly $700 million. Despite this significant personal investment, Mallouk openly states his preference for stocks over sports teams as investments, highlighting that the historical returns of holding stock index funds often surpass those of owning sports franchises. For example, he cites the Los Angeles Lakers’ 11.5% compound annualized return since 1979, which falls short of the 12.4% annualized return of the S&P 500 in the same period. Mallouk underscores this by advising his financial planning clients to prioritize traditional private equity funds before considering sports team ownership, emphasizing the unique non-financial motivations behind many sports investors.

Mallouk’s path to billionaire status stems from growing Creative Planning into one of the largest independent financial advisory firms in the U.S., managing or advising on $700 billion in assets. Originally from Kansas City and a lifelong sports fan, Mallouk’s passion partly motivates his foray into sports ownership rather than purely financial gains. He and his wife have been involved in Kansas City sports for years, including stakes in the Royals and Sporting KC. His approach contrasts with the evolving sports ownership landscape, where private equity firms and multimillionaires are increasingly able to buy into major leagues, enabled by recent rule changes in leagues like the NFL.

The soaring valuations of sports franchises are driven in part by booming media rights agreements, which have injected massive revenue streams into leagues such as the NBA and NFL. For example, the NBA secured a $76 billion television deal in 2024, and the NFL guaranteed at least $125.5 billion over a decade from its media contracts. This financial environment encourages private equity interest not only in professional teams but increasingly in college sports programs and conferences as well, where funds like RedBird and Otro Capital are investing for stakes tied to media rights revenue. While these deals push franchise values higher, the cost-benefit trade-offs may prompt future reconsideration by leagues and institutions.

Mallouk notes that today’s inflated sports valuations largely reflect billionaire owners’ willingness to pay premium prices for the prestige of team ownership, rather than purely objective investment returns. The price multiples for major North American sports teams have risen dramatically from around 2.9 times annual revenue in 2000 to about 10 times today. For his part, Mallouk views Sporting Kansas City as a passion project rooted in local loyalty rather than profit maximization, pledging a “wide open” checkbook to improve the team’s competitive standing. Nonetheless, he warns investors to temper expectations and fully understand the distinctive and sometimes unpredictable nature of sports franchise investing.