A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox.

Last week, the National Women’s Soccer League awarded a new expansion franchise — in Columbus, Ohio — to an ownership group led by Haslam Sports Group for a fee of $205 million.

This represents a $40 million jump from the $165 million that billionaire Arthur Blank reportedly paid for the league’s Atlanta franchise in November. And that $165 million itself was a jump of $55 million from the reported $110 million fee Denver paid in January of last year.

Rewind to 2022, and the expansion fee for a new NWSL club was just $2 million. 

On the surface, this appears to be a story about the NWSL’s growth. Postseason attendance rose 11% this past season, according to the league. Nearly 1.2 million people watched the NWSL finals, up 22% from a year ago, including a whopping 70% jump in the 18-to-34 demographic, the NWSL said.

It makes sense that investors would want to get in now given the league’s growth trajectory.

But, according to investors and bankers, something else is going on that’s affecting the NWSL’s valuations that has absolutely nothing to do with soccer. It has to do with a trickle-down investment thesis driven by the outsized businesses of the NFL and NBA.

Wealthy investors have long been interested in sports ownership, trophy assets that have also produced outsized returns on investment. The introduction of private equity investment, first adopted in the NFL in 2024, has added to the pool of possible buyers. 

This dynamic is welcome news for the entire professional sports industry, which is also benefiting from another strategic investment play — the anti-artificial intelligence trade. Betting on live events is a counter-strategy for those who want less exposure to the tech in a market driven by AI investments.

That’s helped supercharge valuations of the most valuable sports teams in the U.S. According to CNBC Sport, the average NFL team is now valued at $7.65 billion. In 2010, NFL teams were worth, on average, about $1 billion. 

The average value of an NBA team is now $5.52 billion, 18% higher than a year ago. Fifteen years ago, the average NBA team was worth $369 million. That’s an increase of 1,396%. The S&P 500 is up about 422% over the same time period. 

NBA and NFL ownership stakes are becoming too pricey for a class of buyers who have active interest in being a sports team owner — even at the minority stake level. Former New York Giants quarterback Eli Manning said as much in an interview with CNBC Sport last year.

“It’s too expensive for me,” Manning said of a potential minority stake in his longtime team. “A 1% stake valued at $10 billion turns into a very big number.”  

Equity research firm Bernstein wrote in a recent note to clients that NFL team valuations have risen about 17 times in 25 years, “the kind of returns sufficient to give any portfolio manager a legendary status and easily trumping the S&P index or any emerging market index on the planet.”

The main cause of the valuation growth stems from the enormous size of the league’s media rights. The NFL signed an 11-year, $111 billion media rights deal in 2021 — and now wants even more money. The NBA followed with an 11-year, $77 billion deal of its own, starting with the 2025 season. 

Splitting national TV dollars among teams allows even the lowest revenue teams — the NFL’s Arizona Cardinals and the NBA’s Memphis Grizzlies — to be valued at $5.9 billion and $3.75 billion, respectively, according to CNBC estimates.

There’s a fear that “second-tier” sports, including MLB and NHL, may be at risk of losing media rights dollars as the NFL flexes its muscle and asks for more from its media partners. The more money that goes to the NFL, the less money there is for everyone else.

One might expect that dynamic to negatively affect the valuations for those sports. But according to these bankers and investors, that’s not happening. 

As the NBA and NFL have priced out buyers, there’s now increased demand for sports teams with more affordable valuations. That’s helped drive the recent NWSL surge, they say. There’s more liquidity at NWSL team price points, which has led to bidding wars and soaring valuations. 

While the most recent winning buyers — Blank and the Haslams — are already owners of NFL and other sports teams, they’ve had to pay increasingly high prices to fight off other offers. There are far more buying groups willing to write a consortium check for $200 million than pay $1 billion or more for minority stakes in the biggest leagues.

“There’s a lot of demand to get into the sports business but people can’t write the checks to buy into the big four anymore. So what they’re doing is they’re substituting,” said veteran sports banker Sal Galatioto, president of Galatioto Sports Partners. “When supply is fixed and demand goes up, people will bid more to win. The underlying economics are not as important.”

The San Diego Padres are finalizing a sale for $3.9 billion, a record for MLB, despite the team’s regional sports network falling apart a few years ago. While nearly $4 billion is a lot of money, it’s still well below the average value of an NFL or NBA team.

“I’ve got investors coming up to me saying, ‘I can’t afford the NFL and NBA, what do you have for me in MLB, NHL?'” said one prominent sports banker, who asked to speak anonymously because the discussions were private.

The success of the NBA and NFL has funneled all the way down to the bottom of the sports food chain, said Rick Horrow, CEO of Horrow Sports Ventures.

“Major League Cricket was at $5 million. Now the value’s at $30 [million] and going higher. Major League Pickleball two years ago was at $5 million. Now the value is at $15 million or higher,” said Horrow.

Some of this sounds a little like a sports investment bubble, where valuations are divorced from the underlying financials of the leagues themselves.

That’s a real worry for smaller, less established leagues, said Jasmine Robinson, managing partner at Monarch Collective, the largest women’s sports investment fund, with $250 million to invest. It’s why Monarch has focused most of its funds on the WNBA and the NWSL, rather than more emergent leagues, Robinson said.

“Sports has historically been a great investment, but that’s really only for the biggest leagues. It’s not really like you can do any sports deal and you’re going to make money,” Robinson said. “There’s been real scarcity. You do need to be in the leagues that really are going to be leaders to make money. We wouldn’t make a bet on every women’s sports league.”

The big question may be what the threshold is for an established league if there’s an economic downturn that turns off the investment faucet. Monarch is betting the WNBA and the NWSL are above the line, but WNBA franchises have historically never made money, and now they need to pay out far more money to players after this year’s new collective bargaining agreement.