As sporting franchises merge into global businesses, private equity investors are increasingly turning to the sector in search of investment opportunities. Sports teams and franchises offer a source of revenue through broadcasting, advertising, and marketing rights. These media and broadcasting rights are an attractive proposition for PE firms with competitions like the Premier League believing that its income from broadcast rights will top £10bn over the next three seasons.
Interest from PE firms was prompted by the Covid-19 pandemic, which highlighted the consumer’s desire for remote sport viewings and underlined the resilience of the sector. According to Conrad Wiacek, head of sports analysis at GlobalData, sport almost always offers a “guaranteed return on your money” as it is “the last Bastion of appointment TV”. Streaming sites and on-demand television mean that scheduled programming is a thing of the past, however major sporting events concentrate audience’s focus upon a single place and time like few other assets can.
Competitions like the World Cup attract audiences of over a billion viewers which allow companies to advertise to a global audience like no other product can. By PE firms taking minority ownership of media rights, they can benefit from this global outreach. As the global sports market is expected to grow from almost $355bn in 2021 to just over $501bn in 2022, according to Research and Markets, the sector can expect more and more investment from PE firms for years to come.
Investments in sports are no longer regarded as vanity projects for owners with deep pockets.