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Arctos Sports Partners is increasing its stake in the Golden State Warriors, to 13% from 5%, according to multiple people familiar with the agreement.

The NBA team is valued at about $5.5 billion in the deal, the people said, the same valuation as when Arctos bought its initial 5% earlier this year. A majority of this new equity is coming from minority partners, with a small portion from the team’s main owners, Joe Lacob and Peter Guber, according to the people, who were granted anonymity because the matter is private.

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The deal still needs to be approved by the NBA’s board of governors. Representatives from both Arctos and the Warriors declined to comment.

This is just the latest in a growing number of private equity deals across U.S. sports, but a rare one that involves one of the world’s most valuable franchises. Sportico recently valued the Warriors at $6.03 billion, second-highest in the NBA behind the New York Knicks ($6.12 billion) and fourth-highest across all U.S. leagues.

The NBA, MLB, MLS and NHL have all changed their ownership bylaws in the past 18 months to let private equity funds invest in franchises. The loosened restrictions give owners a new way to access capital, and make it easier to sell minority stakes that were becoming difficult to unload. For the funds, the goal is to capture appreciation that has been steady and significant over the past few decades (Guber and Lacob, for example, purchased the Warriors in 2010 for $450 million).

Arctos was co-founded by private equity veteran Ian Charles and former MSG CEO David “Doc” O’Connor. The firm had about $2.9 billion in assets under management as of October, and has already made more than a dozen investments. They include about 17% of the NBA’s Sacramento Kings, and in Fenway Sports Group, the parent of the Boston Red Sox, Liverpool FC and the Pittsburgh Penguins. The group is also nearing agreements to invest in the NHL’s Minnesota Wild and Tampa Bay Lightning.

Under the NBA’s private equity rules, teams can have no more than 30% of their equity owned by institutional investors, and no single fund can own more than 20% of any one franchise. Most funds, including Arctos, can only own equity in a maximum of five teams—so raising its stake in the Warriors allows the group to increase its NBA involvement without hindering its ability to do more deals in the future.

Bolstered by three titles in the past seven years, the Warriors have gradually become NBA royalty in the past decade. The team owns the Chase Center, which opened in 2019 at a cost of $1.4 billion, and the real estate it was built on in San Francisco, along with an 11-acre mix of shops and restaurants, known as Thrive City, just outside the arena.

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