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Illustration: Sarah Grillo/Axios

The National Basketball Association is considering the creation of an investment fund that would buy small equity stakes in a portfolio of teams, as first reported yesterday by Bloomberg.

Why it matters: NBA owners are concerned that skyrocketing team prices mean that there's a limited number of individuals who could buy the next teams put up for sale. Or, as one league source put it: "There are only so many Steve Ballmers and Joe Tsais."

  • This fund could, in theory, help expand the principal buyer pool by assuming some of the new purchase prices. Particularly by introducing institutional investors that have, historically, been shunned by the NBA and other pro sports leagues.
  • It also would become a way for existing minority owners to exit, if desired. Plus perhaps set more of a market price, as opposed to the current model of "last price + 20%."
  • For now, the NBA isn't commenting.

Why the NBA? Because private equity sources say basketball is generally viewed as a better investment opportunity than baseball (shrinking attendance), hockey (geographically limited), and football (liabilities). International soccer is the best comp, although the NBA is still viewed as superior because it has capped player costs.

  • I'm also told that the NBA's plan would be a formalization of an ad hoc process that investment bank Allen & Co. often does for Major League Baseball. I'm still trying to suss out more details of that relationship.

The bottom line: Being a passive sports team owner is really being the person who pays the most for good seats. But owning a portfolio could be appealing for long-term money, and it's only a matter of time before we get a league-managed or third-party fund/marketplace for these interests.

Go deeper: The profound impact of the NBA's nomadic era

Go deeper

FBI, Homeland Security warn of increasing threat to Capitol

Photo: Eric Baradat/AFP via Getty Images

The FBI and Department of Homeland Security predict violent domestic extremists attacks will increase in 2021, according to a report reviewed by Axios.

Driving the news: The joint report says an unidentified group of extremists discussed plans to take control of the Capitol and "remove Democratic lawmakers" on or about March 4. The House canceled its plans for Thursday votes as word of the possible threats spread.

14 mins ago - World

Pope Francis set to make first papal visit to Iraq amid possible turmoil

Data: Vatican News; Map: Danielle Alberti/Axios

Pope Francis is forging ahead with the first papal trip to Iraq despite new coronavirus outbreaks and fears of instability.

The big picture: The March 5–8 visit is intended to reassure Christians in Iraq who were violently persecuted under the Islamic State. Francis also hopes to further ties with Shiite Muslims, AP notes.

"Neanderthal thinking": Biden slams states lifting mask mandates

States that are relaxing coronavirus restrictions are making "a big mistake," President Biden told reporters on Wednesday, adding: "The last thing we need is Neanderthal thinking."

Driving the news: Texas Gov. Greg Abbott (R) said Wednesday he will end all coronavirus restrictions via executive order, although some businesses are continuing to ask patrons to wear face masks. Mississippi is lifting its mask mandate for all counties Wednesday, per Gov. Tate Reeves (R).