In a groundbreaking move within the sports industry, private equity investment is taking center stage in women’s soccer. Unlike other major U.S. sports leagues that have limited private equity involvement to passive, minority stakes, the National Women’s Soccer League (NWSL) is paving the way for these firms to take majority control of the economics of the league.
Sixth Street made history by becoming the first private equity firm to own a team in the NWSL, building the San Francisco women’s team, Bay FC. The firm’s record-breaking $54 million acquisition of the league’s 14th franchise set a new standard in women’s sports investments. Following suit, Carlyle recently partnered with the Seattle Sounders FC to purchase the Reign FC, valuing the team at an impressive $58 million – a significant increase from its $3.5 million value five years ago.
Jessica Berman, the NWSL Commissioner, emphasized the importance of institutional capital in injecting additional resources into the league. With NWSL attendance soaring by over 40% this year, Alex Popov of Carlyle noted the positive momentum in women’s soccer and expressed confidence in the sport’s growth trajectory. The league’s chief business officer, Maya Mendoza-Exstrom, highlighted Carlyle’s ability to leverage its resources and expertise to enhance the value of women’s sports, both on and off the field.
Deloitte predicts that women’s elite sports revenue will surpass the billion-dollar mark for the first time this year. Soccer accounts for approximately half of this revenue, reflecting the sport’s significant contribution to the overall financial success of women’s sports. While women’s sports revenue is currently more reliant on merchandising, ticket sales, partnerships, and sponsorships, the recent $240 million media deal signed by the NWSL signifies a substantial shift towards broadcast rights revenue.
The surge in broadcast deals and the anticipation of lucrative investments have attracted private equity managers to the NWSL. The potential acquisition of Angel City FC by Disney CEO Bob Iger and his wife at a valuation of $250 million signals a new era of valuation records for women’s sports franchises. As private equity interest continues to grow, the NWSL faces the challenge of balancing financial gains with the traditional stewardship of teams by individual owners.
While the NWSL embraces institutional capital for financial growth, other major sports leagues such as the NBA, MLB, NHL, and MLS limit private equity ownership to 30%. The NFL is also grappling with the issue, with Commissioner Roger Goodell acknowledging the significant interest in private equity investments in the league.
Private equity investment has emerged as a game-changer in women’s soccer, revolutionizing the financial landscape of the sport and opening new doors for growth and innovation. As the NWSL navigates this new territory, the balance between financial prosperity and traditional ownership models will shape the future of women’s sports on a global scale.
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