Building a case for the sustainable value within women's sports

Key Concepts

• Flywheel Effect: The cyclical relationship between investment, product quality, revenue, engagement, and valuation in women’s sports.
• Institutional Investment: Investment from established financial institutions, signifying long-term confidence and sustainability.
• Adjacent Markets: Opportunities beyond traditional broadcasting, such as digital platforms, to increase accessibility and viewership.
• Revenue Factors: Sponsorships, media rights, viewership, attendance, and merchandise – key drivers of growth in women’s sports.
• Biomarker Analytics: Utilizing data specific to female athletes to improve performance, reduce injury, and enhance recovery.

A New Economic Era for Women’s Professional Sports

The interview details a significant shift in the economic landscape of women’s professional sports, moving beyond potential and emerging status into a period of unprecedented performance, engagement, and investment. This report, conducted by The Collective at Wasserman in partnership with RBC, highlights the key trends driving this transformation, primarily focusing on North America.

The Shift from Charity to ROI

Traditionally, support for women’s sports was often viewed as philanthropic. However, Alison Walker emphasizes a crucial change: a move towards a demonstrable return on investment (ROI). This shift is vital for the long-term sustainability of these leagues. Investors are no longer solely motivated by a passion for the game but are actively seeking financial opportunities. This is evidenced by increasing valuations and substantial media rights deals.

The Flywheel Effect in Action

Walker describes a flywheel effect propelling the growth of women’s sports. New investment capital fuels stronger product quality on the field, leading to new revenue streams, increased engagement, and ultimately, higher valuations. This cycle reinforces itself, creating a positive feedback loop. This effect is visible across various sports, including established leagues like basketball, soccer, and hockey, as well as emerging ones like volleyball and softball.

Revenue Drivers & Key Valuations

The report identifies four key revenue factors driving growth: sponsorships, media rights, viewership, and attendance/merchandise. These are all experiencing increases due to growing demand and investment. Specific examples illustrate this point:

• WNBA: The New York Liberty is currently valued at $400 million. The league recently secured an 11-year media rights deal worth $2.2 billion with Discovery, Amazon, and NBC. The addition of the Toronto Tempo team is expected to significantly increase accessibility in Canada.
• NWSL (National Women’s Soccer League): Angel City FC is valued at $280 million. The league secured a four-year media rights deal for $240 million with CBS, ESPN, and Amazon.
• WTA (Women’s Tennis Association): A historic deal worth a total of $500 million has been secured, demonstrating long-term sustainable growth in professional women’s tennis.

The Importance of Media Rights & Sponsorships

While all four revenue factors are important, Walker identifies media rights deals as a crucial indicator of success. The substantial deals secured by the WNBA and NWSL demonstrate that investors are recognizing the financial viability of women’s sports. Closely following media rights is sponsorship revenue, as exemplified by the WTA’s recent $500 million deal.

Expanding Beyond Traditional Broadcasting

Access to women’s professional sports has historically been limited through traditional broadcast channels. The increasing demand for these sports is driving media innovation and the emergence of digitally native platforms that offer 24/7 access. This shift is crucial for transforming women’s sports from occasional viewing to a consistent destination for fans.

Investing in the Future: Data Science & Biomarker Analytics

Beyond team ownership, investment is expanding into areas like data science and facilities. A significant opportunity lies in biomarker analytics, specifically focusing on female physiology. Walker highlights that only 6% of sports science research is currently dedicated to women, presenting a substantial area for growth and improvement in athlete performance and injury prevention. Companies like Oracle and Caitlin Labs are leading this charge.

Upcoming Opportunities & Future Outlook

Looking ahead, Walker anticipates continued investment in various areas, including data science and facilities. The upcoming Los Angeles Olympics will showcase the power of sports like volleyball, softball, and cricket on the women’s side, further increasing visibility and accessibility. The launch of two professional volleyball leagues next year also represents a significant opportunity.

In conclusion, women’s professional sports are experiencing a transformative period driven by investment, innovation, and increased viewership. The shift from philanthropic support to a focus on ROI, coupled with the flywheel effect and strategic investment in areas like media rights and data science, positions these leagues for continued growth and long-term sustainability. The future of women’s sports is poised for a significant expansion, offering exciting opportunities for investors, athletes, and fans alike.