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Utah Jazz partners with investor Arctos, looks to expand sports in Utah

With an eye on expanding professional sports in Utah, Smith Entertainment Group — the parent company that is led by Ryan Smith and owns the Utah Jazz — announced on Friday a partnership with Arctos Sports Partners.

Arctos is a private equity group that has invested in more than 20 pro sports franchises across the NBA, NHL, MLB and MLS, as well as European soccer, lacrosse and others. The group’s investment with SEG includes minority stakes in the Utah Jazz, Real Salt Lake and Vivint Arena.

Arctos’ investment in the Utah Jazz is pending NBA board of governors approval.

While Smith has expressed his intention on bringing a third, unique professional sports franchise to Utah, and the partnership with Arctos is a step in bolstering that goal, there is no timeline for SEG or Arctos to expand in Utah, according to an SEG source. So, if you’re hoping to watch MLB or NHL games played in Utah, you’ll have to keep waiting.

“My wife Ashley and I are passionate about the state of Utah and are committed to building organizations that can be a unifying force in our community. Few things do that as powerfully as sports,” Smith said in a statement. “We are excited to partner with Arctos. They are committed to Utah and to investing in this community and our sports teams and facilities. As SEG continues to build out the professional sports landscape in the state, the Arctos partnership brings strong commitment to Utah sports and a deep connection across all major sports leagues.”

Allowing private equity firms to hold ownership shares is a fairly new trend for professional sports. The NBA, which previously banned private firms from buying into teams, only changed its rules in 2020. The NBA’s private equity rules allow a firm to buy into a max of five teams.

Arctos already owns minority shares of the Sacramento Kings, Golden State Warriors, Philadelphia 76ers and now the Jazz.

The NBA opened up to the idea of allowing private firms to buy into shares for a few reasons. Individuals looking to sell their minority stakes in teams would have more opportunity to do so when not only being able to offer to other individuals so the market would open up a little bit.

With the market opening and private equity flowing into teams, values would continue to be bolstered even more than they naturally have. Plus, with all of the financial hits the league took though the COVID-19 pandemic years, allowing private groups to alleviate some of the financial burden helps owners ease into the coming years.

But for Arctos, there’s also the expansion motive.

The group already own minority shares of teams in the NHL and MLB, and since the NFL still doesn’t allow investment from private firms, it would seem that bringing either a professional hockey or baseball team to Utah is what Smith and his new partners are eyeing.

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