Private Equity (PE) investors have had a long-standing interest in the sports world, investing in almost every major professional sports organization from soccer to now football. In fact, PitchBook data shows that firms have almost doubled their investment in sports in the past decade, investing more than $10 billion through Q3 of this year alone. But, aside from major league teams, PE firms are now setting their sights on more niche areas of the sporting world, increasingly investing in less traditional sports.
PitchBook points to a rising interest among PE investors in more niche areas of sports such as padel or volleyball that “are often characterized by their passionate fan bases and potential for explosive growth.” Because they are not as heavily funded as traditional sports, there is a real opportunity for PE to make an investment that will lead to significant growth.
Pickleball, indoor golf, lacrosse, sailing, mixed martial arts, and bull riding are all areas of investment today. According to Bloomberg Law investors are looking to “just about any business that generates revenue from athletes.” They note that there are a finite number of professional teams that are available for investors, and these more niche sports could present the opportunity to generate high returns at a more affordable entry point.
Women’s sports are also benefitting from a boost in investment, fueled by the 2024 Olympics. This includes investments in the USA women’s rugby sevens team, the USA women’s water polo team, and women’s track and field. Women’s basketball is also driving the growing focus on women’s sports, as profitability has soared in the wake of new superstars entering the WNBA. And there is of course the continued popularity of women’s soccer.
Women’s elite sports could generate over $1 billion in global revenue for the first time this year, as reported by Forbes. They also point out that the growing interest in women’s sports is leading to investment in new leagues and teams such as the Women’s Hockey League in North America.
PE firms are even targeting youth sports, an industry that Bloomberg says is valued at $30 billion. These youth leagues often serve as preparation for athletes to go on to play at the collegiate level, and with smaller clubs and leagues merging to create regional powerhouses, PE firms are investing in youth sports camps and tournaments that generate significant revenue.
While some of these sports might not have the national media coverage of the major leagues (yet), they do offer firms an entrée into investment in the sporting world for investors who might be looking to diversify and expand into this exciting area. There is no lack of viewers looking to consume sporting content, and they have a growing number of options to watch from in-person to television to their phones. As fans multiply and more tune in, investors will certainly continue to follow.
