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Jeff Vinik shows that sports teams are hottest new hedge fund status symbol

March 01, 2010  

Hedge funds have been snapping up sports teams the way they used to purchase art masterpieces.

Professional sports teams are competing with art as the favored collectible among hedge fund managers. In the past year alone, at least three managers have bought all or part of a team, and at least 12 hedge fund managers now have investments in sports teams.

The most recent: avid hockey fan Jeff Vinik of Boston firm Vinik Asset Management. The former Fidelity Magellan fund manager is buying the Tampa Bay Lightning of the National Hockey League for an estimated $170 million. The sale includes the Lightning hockey team, the company that operates the St. Pete Times Forum, and two parcels of adjacent land. Vinik will be the chairman and sole person controlling Tampa Bay Sports & Entertainment. He also holds a 12% stake in the Boston Red Sox baseball team. Last summer, Seth Klarman, founder of Boston's Baupost Group, also bought a minority interest in the Red Sox, reportedly purchasing the stake held by advertising executive Ed Eskandarian. The team's owner is hedge fund manager John Henry, of J.W. Henry & Co.

Also last year, David Tepper, the highest-earning hedge fund manager in 2009, bought a minority interest in his hometown Pittsburgh Steelers football team. Duquesne Capital Management's Stanley Druckenmiller withdrew his offer to buy the team in 2008 when the founding Rooney family squabbled. Tepper is not the only hedgie involved in the National Football League. In 2007, three hedge fund managers bought a combined 20% stake in the Oakland Raiders—David Abrams of Abrams Capital and Paul Leff and Dan Goldring of Perry Capital.

Vinik will join other hedgies in the NHL investors' club. Harbinger Capital Partners' Phil Falcone, a former star on Harvard's hockey team, owns 40% of his hometown Minnesota Wild. Jetstream Capital's Joel Dobberpuhl is an owner of the NHL's Nashville Predators. —Stephen Taub

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