An NBA and IMG veteran breaks down how he raised a $300 million private equity fund in a bleak market and how he plans to invest in all things sports

  • NBA vet Bobby Sharma and partner Kyle Charters just raised $300 million for sports-related investments.
  • Sharma discussed raising money in a bleak climate and the deals he’s targeting.
  • He laid out how his operating experience sets Bluestone Equity Partners apart from bigger players.

Last year was bleak for fundraising. The number of private equity and VC funds closing fell by half and the amount of capital raised declined 11% to $923 billion in 2022, according to S&P Global, amid high interest rates, inflation, and slowing growth. Investors also cooled on first-time fund managers that lack a track record of delivering returns.

Bluestone Equity Partners was an exception as a new, mid-sized PE firm. It’s led by NBA and IMG vet Bobby Sharma and investment banking vet Kyle Charters and just announced it closed a $300 million fund to invest in sports-related media and entertainment. Bluestone joins a host of other large and mid-size PE firms swooping in to invest in teams and other sports-related businesses as streamers’ appetite for unique, compelling content continues to grow even amid an uncertain economic outlook.

Sharma said Bluestone anticipates closing in Q1 the first of seven investments it’s targeting in the $25 million to $50 million range, with two or three more that could follow in 2023. 

“We’ve been building this for a year in stealth mode, and no fewer than 15 deals came to us in that time,” he told Insider. “It’s been a firehose in terms of interest from potential targets.”

With the explosive cost of live sports rights, Sharma sees the sports ecosystem as a huge investment opportunity that’s not limited to giant PE firms — though he also believes his operating experience will make Bluestone competitive with large-cap funds when competing for deals.

“There’s some large cap funds in the space that are learning sport, media, and entertainment through their investments,” he said. “And there are some sports media, entertainment, business executives who are learning private equities through their fundraising. But we’re fortunate to have a combination of both.”

Sharma got that experience under David Stern and Adam Silver at the NBA, building its minor league organization, the National Basketball Development League, now called the NBA G-League. At IMG, he worked under the late legendary financier Ted Forstmann, establishing sports leagues in countries including Brazil, Nigeria, and China. Sports media is a vibrant area for investment, and the relationships he formed enabled him to sidestep the traditional fundraising path.

“I didn’t spend one day raising capital,” he said. “All of our capital came through organic relationships and in opportunities that were presented to me in terms of asking me to build a firm and a strategy for a fund of this type.”

There’s been a wave of private equity interest in sports by giants like Blackstone to new entrants like Dynasty Equity Partners. PE firms spent around $30 billion on sports-related deals globally as of September 2022, after spending more than $50 billion in the sector in 2021, according to PitchBook. They’re pouring money into media and production companies that are fueling the sports content boom.

Sharma and Charters are focused on a range of assets and deal types, targeting mature, growth-stage businesses that could include anything from sports teams and media and entertainment companies to ancillary services like data, tech, and live events.

Sports is “essentially the most valuable last commodity standing in the media landscape,” Sharma said. “And that’s created a very competitive market, especially with the large Silicon Valley companies now becoming players in this space, and broadcasters themselves. You’ve got the incumbent media companies that are ensuring their survival by heavily investing as well. There’s a lot of interesting rights holders that are looking for growth and scale and opportunities for leagues, teams, rights holders, to meaningfully grow audiences and connect with them in a monetizable way that didn’t exist before.”

Despite its profitability challenges, online sports betting is another area where Sharma sees a possible opportunity, comparing its challenges to the resistance that sponsors faced when first putting logos on team jerseys.

“Culturally, we’ve adjusted to that, and those have created some really significant revenue streams for teams where they’re getting $20 million plus annually that didn’t exist before.”