Women’s football is keeping private equity off the sidelines.
While the other major U.S. sports leagues — Major League Soccer, the National Basketball Association, Major League Baseball and the National Hockey League — all allow private equity investors to take passive minority stakes, only the U.S. Women’s Soccer League does These companies hold majority ownership and control of the economy.
“We do see institutional capital as a way to inject additional capital into our assets,” NWSL Commissioner Jessica Berman told CNBC.
Last year, Sixth Street was the first team to have a San Francisco women’s team, Bay FC. At the time, the company paid a record $54 million for the league’s 14th team.
The second such deal came a few weeks ago when Carlyle teamed up with men’s team Seattle Sounders FC to acquire the city’s NWSL side Reign FC. The deal values the Reign at $58 million, well above the $3.5 million it was sold for five years ago.
as tradeSounders owner Adrian Hanauer serves as a trustee for Reign FC on the NWSL board, while Alex Popov, head of private credit at Carlyle, serves as an alternate trustee. Popov said the NWSL’s attendance increased by more than 40 percent this year, proving the sport’s momentum.
“We’re seeing this inflection point, and we’re seeing it for the right reasons,” Popov said. “We all have a lot to do in order to continue growing.”
Angel City FC’s Sarah Gorden #11 and OL Reign’s Veronica Latsko #24 during the first half at Lumen Stadium on October 20, 2023 in Seattle, Washington.
Stephen Chambers | Getty Images
Maya Mendoza-Exstrom, the Reign’s chief commercial officer, said the investment aligns with “the intrinsic values of women’s sports.” Carlyle brings a wealth of resources to the game, she said, and the firm can add value in terms of analytics and share expertise from other portfolio companies.
“So we have to make smart choices,” Mendoza-Estrom said in an interview. “We have to run a sustainable business where we can generate multiple times revenue in a very short period of time and bring better products to the field.”
Revenue from women’s elite sports is expected to top the billion-dollar mark for the first time this year, according to Deloitte. Football accounts for about half of that number, Popov said.
The composition of women’s sports revenue is more skewed towards merchandising, ticket sales, partnerships and sponsorships, while men’s sports revenue comes more from broadcast rights. However, in November, the NWSL signed a four-year media deal worth $240 million – 40 times more than the league’s previous deal, although still a fraction of what MLS earns from broadcast rights.
Still, the broadcast industry’s tailwind remains a key bullish thesis for many private equity managers seeking to sign deals in the NWSL, including Carlyle.
Disney CEO Bob Iger and his wife, Willow Bay, are close to a deal to acquire Angel City FC at a valuation of $250 million, according to people familiar with the matter. The valuation would break the valuation record for a women’s sports franchise. The NWSL declined to comment on a potential deal for Los Angeles FC.
As valuations continue to rise, private equity interest in the sport is likely to persist. However, the league is still in trial mode.
“We are proceeding with caution because the type of institutional capital is very different from the type of individual owners who are typically responsible for the management of teams in local markets,” Commissioner Berman said, and whether there are ways to continue to regulate the way institutional capital invests in sports. .
The NBA, MLB, NHL and MLS allow private equity up to 30%. This issue has also caused heated debate in the NFL. NFL Commissioner Roger Goodell said in May that the league was making “real progress” on the issue and there was a lot of interest in the area.
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