Chart of the Week #45: RASFI Q3 Update
Arctos recently released the Q3 2024 performance of the Ross-Arctos Sports Franchise Index (“RASFI”), the first-ever purely data-driven benchmark of investment performance of North American sports franchise assets.
Sports franchises in RASFI representing the “Big 4” North American leagues saw robust valuation growth of 8.0%, or 36.2% on an annualized basis, in the third quarter of 2024.
RASFI performance YTD is 17.4% (23.9% annualized), significantly outperforming the long-term annualized performance for RASFI of ~13%. Strong momentum in 2024 has kept RASFI’s performance trending above the strong performance seen in 2022 (~16% annualized) and slightly lower than the record performance seen in 2023 (~27% annualized).
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RASFI performance YTD is 17.4% (23.9% annualized), significantly outperforming the long-term annualized performance for RASFI of ~13%... Transaction volume in Q3 2024 showed a modest increase in overall sale activity in the Big 4 leagues, when compared to 2023 activity
Transaction volume in Q3 2024 showed a modest increase in overall sale activity in the Big 4 leagues, when compared to 2023 activity, with six non-control and two control transactions taking place. We continue to see transaction volume in the NBA and NHL driving valuations to new heights.
As shown above, on a relative basis, RASFI outperformed every benchmark index in Q3 2024 except for small cap U.S. equities. When looking at the past one-year return, RASFI performs strongly but has lagged public equities as they rebounded from depressed stock prices following public market stagnation from January 2022 through November 2023. In addition, RASFI has outperformed private equity by >16% over the last three years; while private equity has outperformed RASFI over longer time horizons by <200 bps, RASFI’s return profile has come at significantly lower leverage levels and with lower volatility in returns. We view the resiliency of RASFI, and capital preservation across all periods, a key attraction of the sports asset class.