Deloitte’s key sport investment trends of 2023: $1bn+ deals, MCO and women’s sport
This has been a big year for investment in sport. The continued influx of capital into the sector is underpinned by a belief among investors, buoyed by valuation growth across the past two decades, that sport properties remain under-commercialised and offer strong return opportunities.
This is particularly significant as, while there has been a drop-off in global merger and acquisition activity in 2023, investment in sports assets remains robust as investors increasingly realise the value sports assets can offer.
Research from Deloitte’s M&A team has tracked around 200 deals completed this calendar year, with strong activity across various sports and geographies.
As a new class of investors enters the sports industry, it is important to remember that signing a deal is only the beginning. Sport is like no other industry, as incoming investors immediately become custodians of important community assets that are valued by all stakeholders. It is crucial that all those investing in sports assets ensure good governance and a long-term strategy are in place to lay the foundations for the success of their investment.
Here are some of the key trends from the sports investment market in 2023.
Women’s sport – record valuations and eye-catching investments
It has been another significant year for women’s sport, and the same can be said for investments into women’s sport properties. Deloitte is predicting that 2024 will see women’s sport globally produce revenues exceeding $1bn for the very first time, meaning that women’s sport assets are more valuable than ever.
There have been many standout moments across women’s sport this year, with record-breaking franchise sales, team valuations and media rights and sponsorship deals across a variety of sports and leagues.
These deals are significant both in terms of investment value, but also as a sign of the optimism surrounding the growth of women’s sport globally. This investment, paired with other trends such as the unbundling of women’s and men’s teams and deals, presents an opportunity to influence the growth and direction of women’s sport.
Multi-club ownership – growth in numbers
We have seen a surge in multi-club ownership (MCO) in recent years, with over 300 clubs globally now operating in MCO structures, up from around 80 only three years ago.
While MCOs are typically set up to unlock relationships and synergies between multiple clubs from both a footballing and commercial perspective, they remain unproven and continue to attract regulatory scrutiny.
Despite this, the MCO trend remains strong globally and looks set to continue, and it is therefore crucial that, as investors explore the creation or expansion of MCOs, they consider how the regulatory environment may evolve, and that responsible investment remains at the heart of their strategies.
Influential investment and high-value assets
This has been a big year for notable names opening or expanding their investment portfolio in sports, with a number of investments and equity positions obtained by athletes, celebrities and influencers in sports teams, franchises and leagues.
High-profile individuals investing in sport can enable rights holders to activate new commercial networks and engage with unique audiences. As rights holders and investors look to attract the next generation of fans and unlock commercial opportunities, the inclusion of high-profile individuals on cap tables is likely to become increasingly common.
Meanwhile, it is not just the investors in 2023 that have been eye-catching. We have seen a host of properties transact at valuations in excess of $1bn, at both club and league level, highlighting the interest from investors to get involved in a highly competitive sports market.
Diverse investment opportunities luring interest
There has been a real mixed bag of investment opportunities in 2023, with activity across a wide range of markets and sports.
Investments have taken place in over 20 different sports, from the more established (football, Formula One, cricket, tennis, basketball) to those which are emerging or haven’t traditionally attracted investment (padel, flag football, pickleball, slamball), highlighting the diverse range of opportunities in the market.
There has been strong investment globally, with US investors accounting for around half of deal activity, and UK and Middle East investors also significantly involved.
With such diverse assets in the market, it is vital prospective investors conduct thorough diligence and strategic thinking ahead of important investment decisions.
Theo Ajadi is assistant director in Deloitte’s Sports Business Group.