Sal Galatioto is a singular force in the sports business world.
The well-respected, good-humored president of Galatioto Sports Partners (GSP) is often the first call for billionaires looking to buy or sell sports teams. Behind the easygoing façade and charm, he’s a fierce competitor who knows how to win: clients, deals, and the game.
Galatioto didn’t invent sports business banking, but since starting in the late 1990s has represented high-profile clients and put together eye-popping deals that changed the playing field. He represented Walt Disney when it sold its NHL and MLB clubs, helped the Ricketts family buy the Chicago Cubs, and just last year orchestrated the sale of the NHL’s Ottawa Senators for a league record $950 million.
The sports investment banker helped usher in the era of megadeals in 1999 when his client, Dan Snyder, bought the NFL’s Washington franchise, then known as the Redskins, and their stadium for $800 million. It was the biggest sports deal ever at the time, and Galatioto said business for his “one man show” exploded and grew quickly thereafter. (Snyder sold the Washington Commanders franchise in 2023 for a record $6.05 billion.)
The sports business world has only gotten bigger since then, including $25 billion of sports-related mergers and acquisitions in 2023—the third straight year of record-breaking transactions, according to Bloomberg. And Galatioto’s influence and business have grown in tandem with the ballooning franchise values and multibillion-dollar transactions; he left his role as a managing director and head of the Lehman Brothers’ Sports Advisory & Finance Group to form GSP in early 2005.
Ahead of GSP’s 20th anniversary in January, Galatioto granted Fortune an exclusive, wide-ranging interview discussing his career, the state of play in the pro team marketplace, and why he sees today’s record high valuations going even higher. The 72-year-old New Yorker says he still takes the Long Island Rail Road to his office near Grand Central Station and the Metro North to see the New York Yankees (a client) play, including watching the team host the Los Angeles Dodgers (also a client) in this year’s World Series—and spent time in both owners’ boxes.
This transcript has been lightly edited and condensed for clarity.
How would you characterize the interest in sports teams right now?
The deal flow is really strong and demand is greater than I’ve ever seen it. Everybody and [their] brother are trying to get into the business. It’s making people believe this is a valid asset class, rather than buying into fun. I’ve been saying this for 30 years, it’s nice once to be right about something!
Going back to the beginning, two years before the Washington deal, you were an intrepid investment banker convincing your bosses at French bank Societe Generale that sports were underbanked, undervalued, and a huge growth area. What’s the biggest difference between then and now?
The numbers, the value of the media content, and the fact that people are recognizing it. Most teams back then lost money, that’s the reason we use revenue multiples rather than earnings.
No longer do you buy [teams] because you want to have fun, you want to make money and increase your net worth. A lot of people missed tremendous opportunities in the past.
Who was your competition when you started?
The leading bank [in sports] was Fleet National Bank of Providence, Rhode Island, and I figured if I couldn’t compete with that, I couldn’t compete with anybody. (chuckles)
Now the biggest banks on Wall Street are fielding dedicated sports groups and competing with GSP for business with your lean team of 10. How is that changing the game?
Sports is all we do. You want to sell a building, talk to someone else. You want to talk about sports, I know it and I am not distracted by it. I don’t have turnover with executives who want to be the head of corporate finance, but stopped by sports. If you call GSP, you will get someone who’s been there for at least 20 years.
I have a feel for what things are worth, but I’m always wrong because I can always find someone willing to pay more for it than I thought. If you create enough competitive tension you can generally get a good price.
I’m not conflicted in any way; bigger organizations have conflicts. If you have five bidders and they’re doing $50 million a year with real estate and capital markets business (with one of them), you’re hard pressed to sell [the team] away from them. My only constituency is my client. If I’m representing the seller, my job is getting the best possible price, to get the last dollar off the table. We will do it.
If you’re a giant firm and you mess something up, you know when you wake up tomorrow, you’re still J.P. Morgan. I mess up a deal, I’m done. I cannot fail. It’s stressful, but I don’t intend to fail, nor do my people. We have a long track record of success and that makes it a lot easier for us to feel that way.
Franchise valuations have surged in recent years. A far cry from when you started. Do you see them continuing to appreciate?
My first deal [in 1997] was a $15 million loan to the NBA’s San Antonio Spurs that valued the team at $80 million. [Editor’s note: The team had changed hands in 1993 for $75 million. Today, it’s worth $3.85 billion, according to Forbes.]
Valuations are going to continue going up. The media value is like no other and it’s not just a business; the consumers are fans who have a level of loyalty you can’t find in any other business.
Everybody tells me it’s a bubble. They’ve been telling me it’s a bubble since 1999. Those people who passed up these deals [to buy teams] left billions and billions on the table.
The number of teams in the Big Four leagues [MLB, NBA, NFL, NHL] is basically static, but the number of billionaires continues to grow and the number of billionaires interested in this space is growing.
As long as you have more buyers than opportunities to buy, prices are going to be driven up…percentage increases are going to slow down, but there’s still going to be a strong positive trend. We’ll see low double-digit percentage growth rates over at least the next decade.
What else is driving demand?
Legalized gambling, gaming, is becoming more prevalent in sports. The more people that bet on games, the more games they’ll watch, even with no interest in the outcome (aside from their wagers).
What’s the next trend?
I’m starting to see foreign investors looking seriously at North American sports. They’re either calling me or I’m calling them. We’re communicating. When I have deals in the market, I’m getting lots of interest from them.
Foreign investors and sovereign wealth funds are barred from buying teams in some leagues while others allow them to invest at different levels. Do you see this changing?
As prices go up, you’re going to want to increase your investor base. If it’s the right foreign investor and they can vet them thoroughly, I don’t see any reason the leagues should have a problem. Leagues have rules, but it’s not like a constitutional amendment, it’s a bunch of people sitting around a table that can change the rules in one meeting. If it ever impacts the progression of asset values on the upside, they’ll do whatever it takes to keep the momentum going. They can change the rules anytime they want.
Which leagues do you favor for your clients?
I’m risk averse. Anything new can be a great success or a total failure. When I advise my clients I tell them to stick to the established sports. I like the Big Four in the U.S. and I like the premiere names in European soccer.
But in soccer there’s promotion and relegation [to lower-tiered, less lucrative leagues] which changes the risk profile. No matter how badly you run the team, you’re not getting relegated [in U.S. pro leagues]—that’s a big advantage.
Where do you see the best value?
I believe Major League Baseball teams are way undervalued right now. If I was going to put my money into a team right now, it’s one of the sports I’d strongly consider. That doesn’t mean the other sports aren’t great investments, because they are.
How much money do you need to buy a team in these more established U.S. leagues?
You need liquid net worth of at least $500 million to even think about it. Then get a group of investors together and that’s if you put in most of your net worth. Let’s be honest, you have to be a billionaire at this time.
You are a cancer survivor. How’s your health now?
I was diagnosed July 25, 2012, with Stage 4 head and neck cancer. They tell me I’m cured. I’m going strong! I love going to work every day. I like to win. I’m very competitive. It’s not getting the deals done that excites me the most, it’s winning the deals!
You’ve done 137 deals by your count. What are you working on right now?
We’re working on one limited partnership sale of an NBA team, one limited partnership of an NFL team, and two limited partnership sales of MLB teams right now.
What about your future? Any M&A activity involving GSP on the horizon?
I have been approached by some large financial institutions, but not the right fit in my opinion. I would obviously entertain the right offer. I will not retire as long as I can continue to contribute toward the success of the firm.