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Deloitte's 2024 Sports Investment Outlook

An overview of sports M&A trends and market activity

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2023 Snapshot
2024 Outlook
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2023 was a challenging year across global M&A markets, suffering from the impact of high inflation and interest rate hikes amidst a challenging macroeconomic climate. With that said, the sports M&A market showed its resilience with another year of strong investment activity as investors sought out quality assets.

Looking ahead to 2024 and beyond, we expect to see significant levels of investment activity as macroeconomic challenges begin to ease and varying sources of capital continue to flow into the sector.

Sports M&A activity in 2023: An overview

Investment activity was diversified across several sports in 2023, but football (soccer) remained the most liquid market partly due to the sheer number of investable assets.

Football comprised 52% of all sports rights holder deals globally in 2023.

The majority of football deal flow stemmed from North American investors (57%) and English clubs were the primary target, making up 29% of all football deals.

North American investors were the most active sports investors in 2023, with 62% of all deals stemming from investors in this region.

North American investment was focused primarily on domestic deals (56%) with investments abroad predominantly limited to European targets. Second to North America, one in five sports rights holder deals were stuck by European investors and almost 10% of deals were made by Middle Eastern investors in 2023.

2023 saw a rise in minority investment activity, with these deals making up 45% of all transactions.

Minority investment activity was predominantly driven by strong activity in premium North American assets, where franchises and business models are traditionally more stable, relative to other sports assets where sporting performance is critical to executing a successful investment case. Almost 60% of all transactions in the ‘Big Four’ North American sports (American football, basketball, baseball and ice hockey) were minority transactions in 2023.

Of all transactions in 2023, 14% were women’s sport only deals, with an additional 34% of deals into mixed properties that involved both a men’s and women’s rights holder.

Women’s sport deals in 2023 were largely concentrated in football, basketball and cricket.

In football, Michele Kang formed the first multi-club ownership group in the women’s game. While in basketball and cricket, several investments were made into WNBA franchises and we also saw the successful completion of the Women’s IPL auction set a new high watermark for the valuation of a women’s sports team.

Sports M&A activity in 2024: Deloitte’s outlook

Further investment has the potential to generate strong returns for investors and bring a new wave of innovation into sport.

In 2024 we expect that the investor base exploring opportunities in sport will continue to expand, certain sport assets will likely attract record valuations and women’s sport will continue on its growth trajectory.

In the coming year, we expect to see the following trends in sports M&A.

1. Investing in disruption

In 2024 we expect to see investors explore opportunities to ignite market disruption. Investors with deep-pockets and a long-term investment horizon may look to deploy capital across expanding sports such as cycling, sailing or padel, which are rising in popularity and participation.

In time and backed by robust transformation strategies, these deals may stand to mark the evolution of new, premium assets that may challenge the status quo.

2. Rising and polarising valuations

We expect demand for premium sports properties to increase, primarily driven by interest from institutional investors, which will continue to drive valuation increases at the top-end of the market.

This may impact the broader sports investment market in the following ways:

Surge in minority investments: An increase in ticket sizes required to acquire majority stakes in premium sports assets; a growing universe of passive institutional investors; and a growing number of incumbent owners seeking to attract growth capital and/or de-risk their investments, has created an environment ripe for a surge in minority investments.

Polarisation between premium and non-premium assets: As institutional investors continue to demand and drive-up prices for premium sports assets, the valuation gap between premium assets and non-premium assets with challenging growth prospects will grow.

Search for returns in adjacent market segments: As rising prices for premium assets compress returns, institutional investors will seek returns in adjacent markets which stand to benefit from the strong tailwinds generated by premium rights holders.

3. (Re)defining the women’s sport investment case

2023 saw continued growth in the women’s sports market and in 2024 we expect to see an expanding group of investors—including institutional investors, private equity and high net worth individuals—begin to take note.

With deeper pools of capital forming and investing in the segment, including private equity funds with an exclusive mandate to invest in women’s sport, we expect rights holders and their key stakeholders to redefine the women’s sport investment case to attract required growth capital.

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Concluding thoughts

As more capital flows into the sports sector from both new and existing investors in 2024, it will be crucial for investors to understand the stakeholder dynamics that may potentially impact their investment thesis through thorough, sector-specific diligence.

Investing in sports assets that carry significant community, social, economic and commercial value can oftentimes come with complexities not apparent in other sectors. Sound, sector-specific advice throughout the investment cycle is critical to maximising value of investment decisions.

Deloitte defines the sports sector into three sub-sectors, with each comprising of various segments.

Professional spectator sports – Segments include sports rights holders, sports technology and sports marketing;
Leisure sports – Segments include community / fitness centres, indoor sport facilities, golf and country clubs, sport resorts and outdoor sports facilities; and
Complementary sports providers (near-market) – Segments include athleisure, merchandising, equipment manufacturers, broadcasters, stadium operators, food & beverage, and several others.

Our analysis of investment activity and focus for this insights piece is in respect of the sports rights holder segment only.

The information provided in this publication is based on publicly available information and while we have sought to only include sources which may typically be deemed credible, they may be subject to inaccuracies.

Deloitte delivers world class, end-to-end M&A services that drive sustainable, responsible and successful investment into the industry.

The work led by our Sports M&A Advisory and Transactions Support practice includes:

M&A Strategy: providing early-stage advisory services to inform investment and divestment decision-making.
M&A Advisory: leading acquisition and divestment processes, from advisory and planning through to negotiation and execution.
Transaction Support: delivering a full range of commercial, financial and tax due diligence services.
Post-Transaction Support: providing strategic advisory services including strategy development, leadership support, operating model reviews and digital transformation programmes.

Deloitte’s Sports M&A Advisory and Transaction Support practice to date has advised on over 150 investment transactions in sports clubs, competitions, leagues and media businesses.

The practice sits in Deloitte’s Sports Business Group, a leading advisor to governments, investors, sport governing bodies and organisations. To date, the Group has advised clients in over 40 countries, across more than 30 sports, providing knowledge and insight to enable transformational change, resolve significant challenges, enhance value and fuel opportunities for growth.

With a global network of over 450,000 colleagues, including sports M&A leaders based in Australia, Canada, Germany, India, Ireland, Spain, Qatar, UAE and the US, we bring the best international and industry-leading knowledge that Deloitte has to offer to every project.

Learn more by visiting our website.