PHILADELPHIA (KYW Newsradio) — An oligarch with ties to an authoritarian ruler. A hedge fund manager caught up in an insider trading scandal. The co-founder of a private equity firm whose company has been linked to a notorious sex trafficker. This is not your typical All-Star line-up.
But the truth is, it’s hard to know exactly where some of the money in sports, and more specifically, the sources of wealth of team owners come from.
“Sports leagues are places that need big bunches of money, right?” said Henry Abbott, CEO of TrueHoop, an award-winning content network that covers the National Basketball Association. He’s spent years following where and how money flows in the league.
“They actually have a problem in the NBA, which is that teams are so expensive, there are barely any individuals left to purchase them.”
The Philadelphia 76ers ranked ninth out of 30 teams, with a projected price tag of $2.67 billion.
“That’s why [in the NBA], they’re bringing in private equity and other [ownership] formats,” said Abbott, “and this giant pool of money just makes its way into sports.”
The problem, Abbott says, is that this pool of money is flooded with offshore accounts. Once you wade into the water, things can very quickly get pretty murky.
“Once [money] is offshore, you have no way of knowing if it’s from a drug cartel, or bureaucrats stealing money from a government somewhere,” said Abbott.
In other words, when large amounts of money move around, it gets harder and harder to trace and track.
Can we say for certain, for instance, how much of a financial link there is - if any - between former Chelsea soccer club owner Roman Abramovich and Russian President Vladimir Putin?
Or whether New York Mets Owner Steven A. Cohen was involved in insider trading?
Or what Sixers Managing Partner Josh Harris, who helped create Apollo Global with Leon Black, knew about the extent of Black’s relationship with convicted sex trafficker Jeffrey Epstein?
No, we can’t really answer any of these questions, which speaks to Abbott’s point.
A 2021 Washington Post report estimated that roughly 10% of the planet’s gross domestic product is hidden offshore.
“Everyone’s like, ‘Well, what can we do?’ Part of me is thinking we need superheroes. Do we need “The Rock” or something?" Abbott said. “No, all you need is clear ownership. If we know which human being owns a piece…this whole game goes away.”
But Abbott thinks that as long as offshore money continues to seep into the U.S. economy, the country and its sports organizations will remain “super vulnerable.”
“I think this is a thing we haven’t thought about very much as sports fans, which is we don’t really know what’s going on with [money],” he said.
“But we know we’re not in charge, right? There are forces beyond [fans] that we’re sort of subtly told not to worry about. I would like a league where we could talk about that.”