Over the past two decades, the value of sports franchises and related assets has skyrocketed, with rapid revenue growth across various commercial streams including the more traditional broadcasting and sponsorship (both now of course more global than ever), to new commercial tie ups and off field year round monetisation of stadia. While the skyrocketing valuations have prompted some commentators to argue that we could be witnessing the formation of a "sports bubble", this does not seem correct to us. What is often overlooked in this context is the resilience of sports as an asset class due to their unique characteristics. Despite market downturns or disappointing on-field results, fans' attachment to their teams often seems unshakable. This "uncorrelated" investment profile is rare, although is only one of the many factors responsible for the recent advent of private equity in the sector, another being the fact that sports assets constitute one of the few legal monopolies.
In 2024 S&P Global reported that sports services deals reached $31 billion, which is almost four times the volume of 2023. In light of the changes agreed to the NFL policies permitting private equity firms to acquire up to 10% ownership stakes (with subsequent investments into, among others, the Buffalo Bills, the Los Angeles Chargers and the Miami Dolphins), this number is only set to grow. The trend is not just about hype; in addition to the resilience of sports assets, it is underpinned by the potential to diversify revenue streams. From lucrative sponsorship deals and global streaming rights to immersive fan experiences and exclusive digital content. Sports are no longer just a game, they are a global business engine. The rise of interest in women's sports and new franchise competitions further provide an opportunity to turbocharge growth through careful deployment of capital at a more nascent stage of a competition's development. Robust sporting excellence and compelling rivalries between big characters, when combined with good storytelling, give new leagues every chance of being very successful.
Increasing globalisation and smart investment into Formula 1, NFL and cricket have already seen rapid growth in financial performance and global visibility – we look forward to seeing this model replicated with other sports.