Within the sports industry, investment banking is an ultra-competitive, lucrative niche market long dominated by boutique firms focused almost exclusively on this activity. The bigger players in banking are expressing more interest in muscling in. They've had some success, but the small fish won't be pushed out without a fight.

Sal Galatioto is the founder of sports banking industry leader Galatioto Sports Partners. He notes that the relatively small number of deals available makes the battle among competitors extremely fierce. The boutique firms that play only in the sports industry must get 30% to 40% of the deals in order to be viable.

There is no official ranking of deals completed by sports industry bankers. These three firms focus almost exclusively on this sector and have cultivated the reputations necessary to keep the deals flowing.

Key Takeaways

  • Sports investment banking is a profitable niche dominated by smaller firms specializing in the merger and acquisition (M&A) of sports teams.
  • Sports industry bankers can provide other services, such as debt and equity capital financing, buy-side and sell-side advice, and debt refinancing.
  • Because sports investment banking represents such a lucrative niche in the mergers and acquisitions industry, the small boutique firms that currently dominate the market may soon find themselves competing against larger investment firms for sports deals.

Galatioto Sports Partners

Sal Galatioto is one of the most well-known investment bankers in the sports industry. His firm, Galatioto Sports Partners, accounts for a substantial portion of the industry’s deals. Galatioto previously headed Lehman Brothers' sports advisory business, and he founded Galatioto Sports Partners in 2005.

The firm has participated in transactions for many teams, including the New York Yankees, the New York Mets, the New York Jets, the New York Giants, the Chicago Cubs, the Washington Redskins, and the Golden State Warriors. It has three divisions that focus on advisory services, which include buy-side and sell-side mergers and acquisitions (M&As), and debt and equity capital financing.

Inner Circle Sports

Founded in 2002 by Rob Tilliss, a veteran of sports industry work at bigger Wall Street firms, this firm specializes in corporate financing, buy-side and sell-side advice and M&A, facility financing, and consulting.

Inner Circle has worked with an extensive lineup of clients over the past several years, including the Florida Panthers, the Pittsburgh Penguins, the Philadelphia 76ers, the Montreal Canadiens, the National Hockey League, the New Jersey Nets, and multiple European soccer teams. Some prominent deals have included the sale of the Atlanta Hawks for $850 million and the sale of Inter Milan to Indonesian businessman Erick Thohir for $480 million. In 2017, the company advised former Disney chief executive Michael Eisner on his purchase of English soccer team, the Portsmouth Football Club. Inner Circle is also expanding and working with clients overseas.

Game Plan

Headed by Robert Caporale, Game Plan handles team sales and acquisitions, sports lending, debt refinancing, credit card processing, and general consulting for the sports industry. It has worked with teams that include the Boston Celtics, the Golden State Warriors, the Los Angeles Dodgers, the Sacramento Kings, and the St. Louis Blues. Some of the firm’s top deals have included the sale of a limited partner interest in the Boston Red Sox and sale of the St. Louis Blues hockey team.

Expertise Comes in Smaller Packages

Most of these boutique sports industry investment banks have fewer than a dozen employees, but that doesn't imply anything about their knowledge, network of relationships, or expertise in getting deals completed. Often, they can apply the thorough and in-depth analysis required with a personal touch that a sports team owner may not get from a large firm such as Goldman Sachs. As the giants of Wall Street seek bigger pieces of the sports industry pie, these smaller firms will have a tough fight, but the best of them are prepared for the battle.