Michigan Ross School of Business and Arctos Launch Pioneering Sports Franchise Index
First-of-its-kind partnership provides authoritative benchmark for measuring the North American sports franchise market.
The Stephen M. Ross School of Business at the University of Michigan is collaborating with Arctos, a private investment firm, to present the Ross-Arctos Sports Franchise Index. The index will serve as a tool for assessing the aggregate value and performance of North American sports franchises that comprise Major League Baseball, the National Basketball Association, the National Football League, and the National Hockey League.
The Ross-Arctos Sports Franchise Index, conceived by Arctos and Danny Sillman, CEO of Relevant Sports Group and business partner of Stephen Ross, is backed by proprietary data sets comprising hundreds of individual control and non-control transactions in the ‘Big Four’ leagues since 1960 to estimate a time series of average returns. By combining Arctos' deep industry insights and applied research with Michigan Ross' academic excellence and integrity, the index will provide key insights and analysis to potential investors, as well as the broader financial and sports business communities. Additionally, the Ross-Arctos partnership will encourage more academic research and thought leadership around all aspects of sports business operations for the benefit of students and faculty.
“We are thrilled to partner with the team at Arctos to build upon their unique and market-leading presence in the professional sports investment business,” said Sharon Matusik, Edward J Frey Dean of Business at Michigan Ross. “Our shared goal is to combine Arctos’ industry knowledge and experience with Michigan Ross’ deep analytical capabilities and academic rigor to establish such an index.”
Arctos, founded in 2019, was established to bring more than just capital to the teams, leagues, and businesses it partners with. By using data science-backed insights paired with deep operational and domain expertise, Arctos has quickly emerged as a catalyst for innovation within professional sports and private markets.
“Unlike other private asset classes, the professional sports sector has lacked a shared, consistent, methodical measure to benchmark overall asset class performance, individual league performance and individual investor performance. This index represents a significant milestone for institutional investment in the sports asset class and is the culmination of our team’s continued hard work and data-centric approach,” said Ian Charles, co-founder and co-managing partner of Arctos. “We're proud to partner with the University of Michigan’s Ross School of Business, whose academic excellence and leadership in finance and sports business made it the ideal partner for this initiative."
“Stephen Ross is one of the most creative and forward-thinking builders in global sports,” said Sillman. “It is exciting and appropriate that this innovation, which will significantly impact our industry, is housed at the Ross School of Business.”
This month, Michigan Ross launched a new website that includes sports franchise performance trends and research data. Additionally, the website will feature key insights from several Ross faculty members, including Chris Rider and Clay Miller. Rider and Miller have expertise in entrepreneurship and private equity, respectively.
“We believe the Ross-Arctos Sports Franchise Index will materially demystify the risks and clarify the unique opportunities involved in investing in professional sports franchises,” said Clay Miller, Michigan Ross faculty director for the index. “We are confident that this index will fill this gap by allowing for a more nuanced analysis of risk and return in professional sports investing relative to existing methods.”
Notable findings from the Ross-Arctos Sports Franchise Index include:
- The value of North American sports assets included in the index have compounded at 13.0% per annum for over the last 60+ years, outperforming the equity market by 2.5%.
- According to several measures of risk, North American sports assets included in the index possess risk/return characteristics superior to other traditional and alternative asset classes.
In addition, as of our inaugural quarterly report on the index (as of Q1 2024), notable updates are:
- North American sports assets included in the index have returned 4.8% quarter-to-date, 28.1% year-to-date and 16.7% three-years-to-date.
- Year-over-year, North American sports assets have outperformed global equities (23.8%), U.S. small cap stocks (19.7%), private credit (8.8%), private equity (6.0%), commodities (1.5%) and fixed income (1.3%).
Year-over-year, the U.S. media and entertainment sector (53.6%) and U.S. equities (29.9%) outperformed North American sports assets included in the index.
For more information about the partnership, visit https://michiganross.umich.edu/rasfi.
About Arctos
Arctos is a private investment firm that provides bespoke growth and liquidity solutions, differentiated thought partnership, and value creation advice to sports franchises (Arctos Sports) and alternative asset managers, their funds, and portfolio companies (Arctos Keystone). Founded in 2019, Arctos serves as a catalyst for innovation and business transformation for its portfolio companies and its markets. The firm’s proprietary approach is anchored by its unique quantitative research and data science platform, Arctos Insights. Arctos has a team of more than 50 investment and operational professionals with investment and operating expertise across industries, geographies, and economic cycles. The firm is headquartered in Dallas, with office locations in New York, and London. For more information, visit www.arctospartners.com or Arctos’ company page on LinkedIn.About Stephen M. Ross School of Business at the University of Michigan
The Stephen M. Ross School of Business at the University of Michigan is a diverse learning community grounded in the principle that business can be an extraordinary vehicle for positive change in today's dynamic global economy. The Ross School of Business mission is building a better world through business. Through thought and action, members of the Ross community drive change and innovation that improves business and society.
Michigan Ross is consistently ranked among the world's leading business schools. Academic degree programs include the Bachelor of Business Administration, Full-Time MBA, Part-Time MBA (Online and Weekend formats), Executive MBA, Master of Accounting, Master of Business Analytics, Master of Management, Master of Supply Chain Management, and PhD. In addition, the school delivers programs for individuals and custom executive education programs targeting general management, leadership development, and strategic human resource management. For more information, visit MichiganRoss.umich.edu.
