Women’s sports attracting investors

Author Moonshot.news

Published on: 05/09/2024

There is a growing interest in women’s sports as investment opportunities! Sports have become a highly sought after asset class for private equity firms, and the Paris Olympics—the first to feature an equal number of male and female athletes—placed a spotlight on women’s sports as investment opportunities, financial data firm PitchBook says in a report.

“At the Paris games, the US women’s rugby sevens team clinched a bronze medal. The same day, the organisation received a $4 million donation from Michele Kang, an investor who also owns three women’s soccer clubs”, PitchBook reports. 

“Kang donated another $50 million in July to kickstart Kynisca Sports International—an organisation dedicated to advancing women’s sports and named after the first female champion in the ancient Olympic Games.

In a CNBC interview during the Paris games, Kang said she was “flabbergasted” that more investors weren’t viewing women’s sports as a significant opportunity.

Women’s sports is an underserved market, Steven Amato, a partner at consultancy Deloitte, told PitchBook. 

“People are starting to say, ‘hold on a minute, there’s been a whole world here that we haven’t focused on, and it’s a good, solid investment.’”

HOUSEHOLD NAMES

“I can’t remember the last time you had as many household names in women’s sports as you do today,” said Jason Menghi, a partner at Deloitte who works with clients interested in sports investing.

The report says that with major leagues like the NFL (US National Football League) now allowing private equity ownership and adjacent opportunities like stadium infrastructure, private equity is more present in the sports world than ever.

PitchBook data shows that private equity investment in professional sports has grown significantly just this year in terms of deal value, and the trend of increasing deal values and count goes back nearly four years.

“Though transactions specific to women’s teams comprise little of this data, the segment could already be on investors’ radar.”

“The number of people who can afford to get in this space has grown dramatically against the number of available assets,” Amato says. “There is very little supply, and a lot of demand. That is starting to lead to alternative investments.”

When making these deals, long-term media contracts provide a certainty of cash flow for investors, Amato said. Though the popularity of women’s sports is growing, with more eyes on athletes like Caitlin Clark and Simone Biles, the media deals aren’t following at the same clip or size. 

BROADCASTIG AGREEMENTS

“The NBA and WNBA both signed media broadcasting partnership deals in July, and while the WNBA’s $2.2 billion deal is monumental, it’s still just a fraction of the $76 billion for the NBA.”

PitchBook says that the reality is that women’s sports, especially niche ones like rugby, still have a long way to go before they can generate the same revenue as men’s sports—or the same level of PE interest. But the rugby story could be a model for the future if interest in women’s sports continues to rise.

Women’s sport is registering record audiences across a wide range of sports according to the European Broadcasting Union (EBU). 

For the first time in Olympic history, women athletes had as many places in the Paris 2024 Olympic Games as male athletes. 

PRIZE MONEY

But the gender gap persists: No women feature among the Forbes 2024 list of 100 highest-paid athletes in the world and prize money for women’s sport continues to lag behind men’s.

In 2023, the Women’s World Cup awarded USD 150 million in prize money, a 300% increase over 2019, but still only about a third of the USD 440 million the men got in Qatar 2022.

UN Women says the equal number of places in Paris for women and men is an achievement that shows the extraordinary trajectory of women’s sport since the first modern games featuring female athletes in 1900, where women represented just 2.2% of competing athletes.

“Although media coverage of female athletes has nearly tripled in the last three years, women still receive far less coverage (just 16% of total sports coverage) than their male counterparts. Increasing the visibility of female athletes is essential to providing more role models in sports who can inspire girls to continue playing.”

The UN Women reports that almost 73% say they watch women’s sports at least a few times a year, not far behind the percentage who watch men’s sports with the same frequency (81%).

The FIFA Women’s World Cup Australia and New Zealand 2023 attracted the largest audience for women’s sports in history, reaching approximately 2 billion people.

”Girls who play sports tend to stay in school, delay pregnancy, and get better jobs, according to UN Women.

A report from consultancy Deloitte shows that 85% of surveyed women who played sports as children believe the skills they developed were crucial to their professional success. This rises to 91% for women in leadership roles, and 93% for those earning USD 100,000 or more.

However, girls drop out of sports by age 14 at twice the rate of boys due to social expectations, lack of investment in quality programmes, and other factors.

For example, 21% of female professional athletes have experienced sexual abuse at least once as children in sport, compared with 11% of male athletes, the UN Women report shows.

From the UN report:

• 88%of sports fans regard pro women athletes as impactful role models for young women.
  Fans are 2.8 times more likely to purchase a product recommended by a woman athlete rather than by another type of influencer.
• According to World Athletics, female athletes have a 14% larger social media following than male athletes and recorded a four per cent spike in the number of Google news searches of female athletes in 2023 compared to 2022.
• But barriers and gender bias persist. According to the Sport Integrity Global Alliance, only 26.9% of executive positions in international sport federations are held by women. Of the 31 International Sports Federations surveyed just three had women at the helm.
• In the International Olympic Committee, 41% of members are female.
• Gender-equal representation on IOC commissions was reached in 2022 – 100 per cent increase since 2013.
• Tennis was the first sport to guarantee equal prize money for major tournaments. The US Open started this in 1973, due to Billie Jean King’s advocacy and the creation of the Women’s Tennis Association. Since then, all four major tennis tournaments (US Open, Australian Open, French Open, and Wimbledon) have adopted equal prize money.
• The Professional Squash Association, World Surf League, and a handful of other professional sports have also equalised men’s and women’s prize money.
• Norway became the first country in 2017 to offer male and female football players equal pay when representing the country in international games in a standard-setting move that has since been adopted by other football associations across the world including Brazil, Wales, and Australia.
• The US Women’s National Soccer Team in 2022 secured a landmark equal pay settlement after a years-long legal battle that set an equal pay rate in all international games.
• However, many women’s teams still struggle with deep inequality. A recent study by FIFPRO, the global professional footballers’ union, found that 29% of women players who responded had not received any payments from their national teams for World Cup qualifying tournaments.