Jim Cramer is taking aim at Blue Owl Capital (NYSE:OWL), arguing the private equity firm is drifting away from investor priorities as it explores a minority stake in the Cleveland Cavaliers.

In a Friday post on X, Cramer questioned the move directly, writing: "More disappointment: why is Blue Owl not focused on IMPROVING its balance sheet…. The Cavs? Really?"—a jab at the firm’s growing push into sports ownership rather than financial fundamentals.

The deal under discussion would see Blue Owl acquire roughly a 5% to 10% stake in the NBA franchise through its Dyal HomeCourt Partners fund, which has already built a portfolio of team investments, including stakes in the Sacramento Kings, the Minnesota Timberwolves, and the Atlanta Hawks.

Cavaliers—valued at about $4.86 billion by Sportico—are among the NBA’s most valuable franchises. Majority owner Dan Gilbert has reportedly been seeking to sell around 15% of the team since last year, opening the door for new institutional investors.

The potential transaction highlights a broader trend: private equity firms increasingly treating sports franchises as alternative assets. 

According to CFA Institute analysis, more than 74 North American teams now have some level of private equity involvement, as firms are drawn to rising valuations, stable media rights revenues, and scarcity value in elite leagues. 

"Between 2019 and 2024 alone, private equity investors deployed more than $55 billion into sports-related assets, spanning franchises, media platforms, and stadium ecosystems," the report stated.

Regulatory changes have also accelerated the trend. U.S. leagues—including the NFL, NBA, MLB, and NHL—now allow minority private equity stakes, opening the door for funds to treat teams as long-duration financial assets rather than pure ownership prizes.

Analysts say the appeal is structural: franchise values have surged into the billions, media rights deals provide predictable cash flows, and limited supply creates built-in pricing power. That has helped transform sports teams into what many institutional investors now classify as alternative investments, distinct from public equities or credit markets.

"The artificial scarcity built into professional leagues reinforces this alternative-asset classification. The NFL, NBA, MLB, and NHL each operate as closed ecosystems with a fixed number of franchises. Adding a new team requires approval from existing owners, so the supply of available franchises grows extremely slowly — if at all. That scarcity keeps demand for ownership stakes persistently high, and it means the financial performance of the asset class is driven by league-specific economics rather than the broader stock or bond market," the report said. 

Still, critics like Cramer argue the pivot raises questions about priorities, suggesting that attention on headline-grabbing sports deals may come at the expense of core financial discipline.

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