The NBA will accept a new form of investments in its teams, which will expand the pool of capital sources available to owners. The decision should increase the value of franchises due to this new access to capital.

Franchises will be permitted to accept investment from endowments, pension funds and sovereign wealth. Foreign governments and large university endowments could be allowed to buy small, passive stakes in NBA franchises. The NBA will still approve new investors on a case-by-case basis.

The new rules are an expansion of the league’s embrace of institutional money. In 2020, the NBA became the first major U.S. league to approve private equity investments.

The Ontario Teachers’ Pension Plan was once an investor in MLSE, the parent company of the Toronto Raptors, but no NBA team has taken capital from a pension fund, endowment or sovereign wealth fund under the new rules.