Investing in Sports: Women’s Sports and the Future

Market Momentum and Drivers of Growth

• The current surge in women's sports is driven by a convergence of exceptional athleticism, shifting corporate sponsorship strategies, and unprecedented fan demand across multiple cultures and communities.
• Stacey Sonnenberg (Head of Global Sports Finance, Goldman Sachs) attributes the momentum to a 50-year investment trajectory in U.S. women's athletes, anchored by the 1972 Title IX legislation and the 28-year evolution of the WNBA.
• Global competition is intensifying, with European football leagues rapidly expanding women's teams and investment in the U.S. women's national team (USWNT) serving as a primary catalyst for international interest.
• Media rights values are rising significantly; the NWSL recently secured a four-year deal worth $240 million, reflecting the league's status as the fastest-growing league in the world.

Valuation Metrics and Investment Returns

• Current average valuations reveal a significant gap: WNBA teams average $96 million compared to $3.9 billion for NBA teams, though growth rates suggest convergence.
• Compounded Annual Growth Rates (CAGR) for WNBA and NWSL valuations are approaching or exceeding historical benchmarks set by the NBA and MLS, respectively.
• Sonnenberg projects that WNBA and NWSL teams could achieve valuations comparable to current men's league peers within 10 to 20 years, necessitating "patient capital" for sustainable growth.
• Investment returns are projected to rely on ongoing capital deployment for facility upgrades, direct-to-consumer media infrastructure, and expanded local revenue streams rather than immediate profitability.

Key Investment Areas and Strategic Opportunities

• Facilities: Significant capital is being deployed to build world-class training centers and stadiums to control fan experiences, exemplified by the Las Vegas Aces' training facility and the Kansas City Current's stadium project.
• Local Revenue vs. National Split: Unlike national media partners that share revenue, team owners can directly influence valuation by driving local non-media revenues, a critical lever for near-term growth.
• Sponsorship Activation: Investors are focusing on creating "true activation opportunities" for sponsors to drive engagement, addressing historical gaps in sponsorship levels compared to men's sports.
• Name, Image, and Likeness (NIL): While NIL legislation has accelerated visibility and revenue for college athletes transitioning to the pros, Sonnenberg notes the rules remain complex and the rollout has been "messy," creating a need for financial education regarding after-tax contract values.
• Emerging Leagues: Investors are expanding focus beyond basketball and soccer to women's hockey, volleyball, and flag football, with participation for girls in flag football up 63% (to 500,000 participants in 2023) ahead of its Olympic debut in 2028.

Angel City FC Ownership and Strategy

• In July, Willow Bay (USC Annenberg Dean) and Bob Iger (Disney CEO) acquired controlling ownership of Angel City FC (NWSL) for $250 million, making it the franchise with the highest recorded valuation in women's sports.
• The decision to purchase was described as taking "a blink of the eye," driven by the couple's long-standing fandom and alignment with the team's startup-like culture and purpose-driven values.
• Bay counters "naysayer" arguments regarding the high valuation by emphasizing the asset's unique ability to defy the "glass ceiling" and drive equity for women across the industry.
• Bay identifies specific growth gaps to monetize, noting that women buy more sports merchandise than men but are underserved by a 9-to-1 margin in SKU availability and supply.
• The new ownership structure aims to align capital and governance to sustain the team's "startup" speed while providing a stable foundation for future generations of players.
• Strategic priorities include expanding the team's international reach, deepening player support systems for both on-pitch excellence and off-pitch professional development, and leveraging the diversity and affluence of the women's sports fanbase.
• Bay views success primarily through the lens of social impact and equity generation for athletes, alongside enterprise value growth that lifts the entire NWSL ecosystem.