Have you ever randomly turned on the TV and found the most bizarre sports playing?
Cornhole, pickleball, or slamball.
Interestingly…
This is just the start of emerging leagues.
Let’s Dive In 👇
Emerging Sports Leagues
~$30 billion of investment capital has flowed towards sports leagues, teams, and media assets since 2020.
Take a look at some of them:
- WNBA: Valued at $1 billion
- NBA Africa: Valued at $1 billion
- Drone Racing League: Raised $80M
- All Elite Wrestling: $400 million valuation
- Premier Lacrosse League: $140M valuation
- USFL: $150 million raised and merger with the XFL
- Rough N’ Rowdy Boxing: Acquired by Barstool Sports
- Overtime Elite: Launched by the media company, $1B valuation
I believe there are five core trends accelerating new sports leagues:
- Ability to bet on everything
- Media platforms need content to fill
- Rise of PE and sovereign wealth funds
- Increase in capital + attention for women’s sports
- Athletes taking an increased interest in ownership
Macroeconomics of Sports Leagues
The sports industry follows the “3 C’s”:
Content, commerce, and community.
Many consumers define their personal identities by their sports fandoms — spending time, money, attention, and emotional energy.
This has significantly boosted the sports sector; it’s expected to reach $600B by 2025 and $826B by 2030 (11% YoY growth).
As stakeholders throughout the consumer economy compete for market share, they all need to “pay rent” to the major teams and leagues for access to their IP (and the fandoms that come with it).
For example, look at the NFL:
- traditional media – $113B deal
- trading cards – Fanatics exclusive
- sports betting – $1B deal w/ sportsbooks
- gaming & esports – $1.5B deal w/ EA Sports
- e-commerce – Fanatics exclusive merchandiser
- data and technology – $120M/season with Genius Sports
- tickets and live events – LiveNation / TicketMaster exclusive
- AI, web3, and VR/AR are up next
The values and varieties of revenue streams for leagues and teams that follow the tides of the modern consumer economy continue to rise.
Live Sports
In the post-Netflix era, live sports stand as the final aggregator of concurrent, culture-shaping viewership, drawing the masses together.
Viewership numbers aren’t what they used to be, yet live sports play such a unique role in our culture, that they are more valuable than ever:
- The NFL has almost one million fewer weekly viewers today than it did in 2010. However, the value of the media packages is more than double ($113 billion).
- The NHL’s viewership is nearly half of what it was in 2010, yet it recently doubled the value of its live rights package.
- In 2005, 14 out of the top 100 most-viewed TV broadcasts were live sports events.
- In 2022, live sports accounted for 91 of the top 100 most-viewed broadcasts.
Global sports media rights are expected to bring in $85 billion annually by 2025, a 75% increase from 2018.
International Growth
In the early days, pro and college sports were regional — the birth of cable created national sports fandoms.
In today’s era of streaming and social media…
Sports & entertainment companies are increasingly becoming global enterprises:
- The Indian streaming market is expected to grow by $15 billion over the next decade (25% CAGR).
- The Asian streaming market is expected to grow by 11% YoY between 2023-2027, with a $400 billion market potential.
- The Latin American streaming market is projected to grow at a CAGR of 18%.
- In 2021…Netflix, Amazon, Disney+, and Discovery+ increased their European subscriber base by 4600% YoY.
As the world fragments, sports leagues become more valuable because they are one of the only things left that can aggregate tens of millions of people in one place at one time.
New Sports Leagues
The sports world used to be a zero-sum game: there were the “Big Leagues” and then there was everyone else.
With the proliferation of streaming and social media, “emerging leagues” are empowered to find their fans (and fans of these leagues are empowered to find each other).
This is especially true for the younger demographics…
Previous generations inherited their fandoms through a scarcity of choice (had to pick between football, basketball, baseball, and hockey).
There’s now an abundance of consumer choice — especially for digitally-native consumers.
Esports Opened The Door
Esports has replaced traditional sports fandoms for many Gen-Z consumers.
79% of eSports viewers are under 35 years old. For comparison, the average MLB fan is 57 years old.
Emerging leagues are starting to recreate the esports playbook.
A great example is the Drone Racing League (DRL):
- Broadcasted across 15 platforms in 140 markets worldwide.
- The 2021 championship match reached 21 million viewers on Twitter alone (for comparison, the 2021 NBA Finals on ABC averaged 9.91 million viewers).
- 70% of DRL fans don’t engage with the big five sports.
- Its TikTok account has 5 million followers, more than both the NHL and MLS.
This playbook is replicable for other emerging leagues.
And investors are mobilizing to capitalize on this unique market moment.
What’s The Future Hold?
- We’ll start to see more media companies and sportsbooks align with emerging leagues.
Live sports media rights have become the most expensive content to acquire and sportsbooks spend billions on acquiring users.
Think there are some interesting plays to be made at this intersection.
- Investors will disperse capital into alternative leagues.
While emerging leagues may not reach the scale of traditional counterparts, they present similar ROI profiles with significantly lower entry costs.
Investors can spend far less money on far more substantial ownership stakes.
- Leagues will embrace “Fan Ownership” through blockchain technology.
Traditional sports leagues are running out of billionaires so they turned to PE funds and IPOs.
Emerging leagues have a unique opportunity to make headway in an increasingly “fan-first” competitive environment.
It reveals a glimpse into a possible future where all platforms are built, operated, funded, and owned by their users (from fans to partners).
Leaving you with this…
Exciting times are ahead as sports, media, and technology collide head-first.
Some Emerging Sports Leagues I find fascinating:
- Prep Super League – building a 11on11 amateur football property
- SAILGP – created the first fan-owned team in history
- LOVB – raised $35M to roll up a bunch of volleyball properties
- Pro League Network – creating a portfolio of bettable sports leagues
- Sport Fishing Championship – consolidating saltwater fishing leagues
- Premier League Lacrosse – continues to shatter viewership numbers
- Athletes Unlimited – putting together a portfolio of women’s sports
