Aug 7, 2024, 10:00 AM ETInterview, Fireside Chat

Alexis Ohanian: The Full P&L Breakdown of the World's Most Valuable Women's Sports Team | E1187

Alexis Ohanian entered sports ownership after observing a $4 million valuation for Megan Rapinoe's soccer team in 2019, which he deemed irrational given the potential brand value of individual players.
Ohanian identified a market inefficiency where women's soccer teams were operated as "charity" projects by legacy owners rather than commercial enterprises.
He partnered with Natalie Portman, Cara Delevingne, and Julie Dreyfuss to launch Angel City FC, where he provided the capital while the founders operated the business.
The initial entry cost was $1 million for the expansion fee, which Ohanian described as "pretty rich" given the previous market state where teams sold for mere millions.
Ohanian viewed the investment as a "tech startup" bet with an anticipated 10-12 year exit horizon, aiming to build a billion-dollar franchise by applying Silicon Valley discipline to sports.

Ohanian personally invested $250,000 through a trust for his daughters to create a "Serena and Alexis's daughter" narrative, serving as a marketing tool to legitimize the brand's story to investors and the public.
He structured Angel City FC with a majority ownership stake held by the three female founders, intentionally mimicking a tech startup's founder-friendly dynamic rather than a traditional sports ownership model.
The organization operated with no board control for Ohanian, a decision he later acknowledged as a mistake, leaving him liable for team costs without voting power.
The team generated revenue as early as 2020 by selling print-on-demand merchandise via a portfolio company (Fourth Wall) before a logo or players existed, generating hundreds of thousands in revenue based on brand values alone.
Ohanian implemented a "brute force" community strategy involving 1,600 personalized thank-you videos to early supporters to drive organic word-of-mouth growth.

Angel City secured a seven-figure, record-breaking front-of-kit sponsorship with DoorDash, leveraging Ohanian's network to introduce a blue-chip tech brand to women's sports.
The DoorDash deal created a "halo effect," signaling to other corporations that women's sports offered viable, brand-safe marketing opportunities.
By the previous year, the team achieved $31 million in annual revenue, the vast majority derived from brand deals and sponsorships rather than traditional ticket sales or merchandise.
The club renegotiated media rights, transitioning from a "pittance" ($50,000–$100,000) on the Lifetime network to a $60 million annual deal split between CBS, Amazon, and ESPN.
Ohanian advocates for a "positive-sum" mindset within the league, where teams share revenue data to force higher valuations for all members rather than hoarding information.

The business model relies on treating the team as a content house, storytelling about players during every minute they are not on the pitch to create brandable assets.
Female athletes are described as inherently more sophisticated at content creation due to a lack of historical support, resulting in higher engagement than male counterparts.
Ohanian funded a $4–$5 million reality show, The Offseason, featuring 11 professional players living together in Miami to generate authentic drama without manufactured conflict.
The show, produced for X (formerly Twitter), garnered tens of millions of views in its trailer phase, proving the viability of high-production reality sports content.
Ohanian argues that the "free market of ideas" and viral potential of women's sports highlights are superior to other sports, making them a primary competitor for the global attention economy.

The NWSL salary cap was approximately $2.75 million per team, with median player salaries around $30,000–$40,000, forcing athletes to supplement income through external brand deals.
Ohanian contrasted this with the men's game, where top footballers earn $50–$130 million annually, highlighting a massive valuation gap and disparity in professional sustainability.
He predicts a "power law" distribution of team value (potentially 90-10) driven by software adoption and first-mover advantages in technology and fan engagement.
Ohanian explicitly stated he has not sold his stake, viewing Angel City as a long-term hold intended to appreciate to a billion-dollar valuation within a decade.
Recent reports of a "sale" were clarified as a secondary investment from Bob Iger and Willow Bay, who acquired a minority stake but not full ownership control.

Ohanian identifies a lack of technological adoption in sports, citing poor fan engagement infrastructure such as stadium Wi-Fi bans and the absence of charging ports (citing the Clippers' USB-C initiative as a rare exception).
He predicts that 80% of scripted entertainment, reality TV, and lower-tier music will be displaced by AI-generated content, leaving live sports and exceptional human storytelling as the only viable premium products.
Ohanian believes the NFL and MLS are overvalued due to a lack of global competitiveness, whereas the NWSL is positioned to outgrow them in value within ten years due to storytelling excellence.
He views private equity entry into sports as a necessary evolution to professionalize teams, moving away from "rich family toys" to sophisticated, data-driven businesses.
Ohanian identifies beauty, fashion, and tech (e.g., Coinbase, Expansify) as the next major categories for sports branding, noting that women's sports are uniquely positioned to attract these sectors.

Ohanian cites Ethereum (pre-token sale) and Grubhub (Goat) as his top two investments, noting a $17.1 million return on Ethereum and a $7.4 million return on Grubhub.
He identifies "Relentlessness" as his primary skill, driven by a childhood awareness of mortality and a mother's terminal cancer diagnosis that prioritized maximizing time.
Ohanian admits to selling Clubhouse too late and missing an opportunity with Zenefits due to market timing and fund mechanics.
He contrasts his love for the "outcome" of sports with the process, noting that athletes like Serena Williams often endure the process solely to win, whereas his own work is driven by intrinsic passion.
Ohanian predicts that female fashion and "fits" in women's sports (e.g., WNBA) will soon dominate cultural conversations, overshadowing the traditional male-centric fashion narratives of the past.