The huge value of the club is locked in before its matches kick off, ticket sales or player signings. According to sources close to Angel City FC, the Series A funding was initially evaluated on the size of the supporter network built by the club and its sponsorship revenue.
Since then, Angel City FC's sponsor lineup has grown - topping $10 million in sponsorship revenue this year and $45 million in cumulative sponsorship commitments - while selling more than 16,000 season tickets. Soccer Stadium Digest data shows that an average of more than 19,000 fans showed up for games at Banc of California Stadium this season, nearly 5,000 more than the second-place Portland Thorns. The average ticket price is $41.
Prior to the aforementioned athletes' recent investment in Gotham FC, Asian businesswoman Y. Michele Kang purchased a majority stake in the Washington Spirit Women's Soccer Club, becoming the first Asian woman to hold a majority stake in an NWSL team.In the winter of 2021, as the founder of Cognosante, she beat out billionaire Todd Burleigh for $35 million to complete the The deal. After failing to acquire the Washington women's soccer team, Burley looked overseas, purchasing the Chelsea men's and women's soccer teams in the English Premier League and becoming the new owner of the Blues.
The surge in NWSL team valuations reflects widespread investor optimism that fan, broadcaster and sponsor interest in the NWSL is growing and that the league is still in the early stages of rapid growth.
Portland Thorns owner Merritt Paulson believes the team's valuation will soon skyrocket as numerous companies are willing and eager to invest in women's sports and provide support.
A few years ago, it was unheard of for an NWSL team to be sold for tens of millions of dollars.In 2019, OL Groupe, the parent company of the Olympic Lyons, acquired 89.5 percent of the Seattle Monarchs for $3.51 million, a mere one-tenth of what the Washington Spirit sold for.
According to NWSL Commissioner Jessica Berman, factors contributing to the rise in team valuations include societal trends toward gender equality and female empowerment, the league's recent increase in potential sponsorship and media revenues, and the just-completed five-year labor negotiation agreement, which ensures a foreseeable and peaceful relationship between labor and management in the future. Additionally, the overall appreciation of the teams themselves has also contributed.
"Investors are looking to get in early." Berman said, "We know that, benchmarked against other professional sports investments, these assets of ours will appreciate, and potentially rapidly, especially so when backed by these favorable factors."
Wang Frost Drives Louisville Athletics Attention
Incredibly, most recent team valuations have been based on short-term financial return expectations. One league source said that in past years the NWSL has lost an average of $3 to $4 million per team per year.
"Do these numbers match typical financial valuation analysis and revenue multiples? Probably not." Chuck Baker, co-chairman of Centurion's sports and media business, said, "It's all about upside. Given the typically long holding periods and low frequency of trades for these teams, investors are bidding for the long-term appreciation of the team."
Baker, who has advised on a number of NWSL team trades, added that basic supply and demand (i.e., more potential investors than there are teams available for sale) is a big driver of team appreciation. That's the same reason the cost of league expansion is expected to surge.
Expansion will lead to larger investments
According to ESPN, Louisville Athletics, where Wang plays, paid an expansion fee of $1 to $2 million to join the NWSL last year. Subsequent additions Kansas Currents, Los Angeles Angels and San Diego Waves had slightly higher expansion fees than Louisville Athletics, but none exceeded $3 million.
And the NWSL is now in the midst of a new round of expansion that is expected to be far more expensive than before.The NWSL is bringing in two new ownership groups with far more potential bidders than there are new expansion teams. One of those seats will go to the owners of Real Salt Lake of the USL, who have a contractual option to re-establish an NWSL team in Utah.
USL President Don Garber believes that many USL owners are approaching the NWSL league about the possibility of investing in a women's team. He points to Orlando and Portland as two cities that have had great success with both men's and women's soccer teams, Garber said, "It's great to have two soccer teams in the same stadium and for them to represent the highest level of professional soccer in their markets."
The auction, which is being handled by sports boutique investment bank Inner Circle Sports, is still in its early stages, and Berman noted that recent valuations are only being used as potential benchmarks, with people familiar with the matter saying that it is expected that the expansion could cost as much as $50 million. But while the final winning bid price is an important factor, the NWSL is most interested in finding the right partner, Berman said, adding that they care most about the quality of the partner, its facilities, and its geographic market. The league aims to announce two new expansion markets by the end of the year.
"The world has changed." Paulson said, "In the past, we had to work to get people interested in expansion. And now, Jessica Berma faces a pretty tricky job because she needs to undermine interest in expansion." Paulson said, "There are just too many owners interested in starting a women's soccer team right now."
The NWSL has come a long way in this regard, and when Paulson signed on as the league's founding owner a decade ago, his biggest concern wasn't whether women's soccer would catch on in Portland (in fact, the Portland Thorns became an overnight sensation, turning a profit in their first season in the league), but whether the league itself could be run. This concern was not unreasonable, considering that the two previous attempts at top-level professional women's soccer in the United States (Women's Major League Soccer, WUSA; Women's Professional Soccer, WPS) had both failed after three seasons of existence.
NWSL League Sponsor
Those who think the value of NWSL teams will rise are hoping the league will get more broadcast rights and sponsorship revenue in the next broadcast renewals.The NWSL's streaming deal with Amazon's Twitch platform is set to expire at the end of this season, and its television deal with CBS Sports is set to expire at the end of next season.
Multiple sources say the league is becoming increasingly professionalized and sophisticated, which could lead to larger investments. The league will move its headquarters from Chicago to New York next month.Berman revealed that the league is hiring management talent who will be responsible for identifying, and building, new revenue streams, including fantasy sports, gaming, and more. Other stakeholders pointed to league-level developmental leagues and the like as other opportunities to generate revenue.
Expansion isn't just happening in women's soccer.The WNBA has announced that it will expand to 40 games for the 2023 regular season, hopefully before the 2024 season.
And WNBA expansion cities are evaluated on dimensions such as consumer psychographics, demographics, on-site arenas, NCAA fans, current WNBA fans, peripheral sales, ratings, city's basketball base, number of star players, and intent to build a team. As of October 2019, Philadelphia is the fourth largest television market in the United States, according to Nielsen. The three cities ahead of Philadelphia - New York, Los Angeles and Chicago - all have WNBA teams.
2021 WNBA regular season ratings up 16%, a 14-year high. With Han Xu's return to the New York Liberty, the WNBA is getting more and more attention from Chinese fans. It is worth mentioning that with a unique investment vision, Tsai Chongxin acquired the New York Liberty from James Dolan and MSG Sports in early 2019. Mr. and Mrs. Tsai Chongxin, Durant 35 Capital and the aforementioned Washington Spirit owner also invested in Just Women's Sports, a women's sports media platform.
Han Xu (1910-1992), Chinese communist leader and politician
A two-pronged approach to media exposure + marketing pushes women's sports into the mainstream
The Getty study found that 75% of brands and organizations want to see female athletes get authentic media exposure, i.e., showcasing their athleticism more than their looks.
At the same time, 72% of the organizations that participated in the survey agreed that the sports industry could play a greater role in promoting women's sports and female athletes. Women's sport needs better media exposure and smarter marketing to really break into the mainstream.
Broadcast data shows that women's sport has a huge audience. According to French television, the recently concluded first women's Tour de France attracted an average of 2.25 million French viewers per stage, with an average viewership of 26.4% over the eight race days.
On digital platforms, the Women's Tour video content reached 22 million viewers. On social media in particular, Women's Tour de France followers grew by 90% to 209,000 during the race.
Women's Tour de France
Head tournament IPs are ramping up for the women's version. The inaugural season of the Women's IPL is scheduled for March 2023. Soccer events, on the other hand, are looking to attract viewers to women's soccer, sell tickets and generate sponsorship revenue, as evidenced by the recent record-breaking attendance at the Women's Euro 2022.
UEFA predicts that commercial returns from women's soccer in Europe could increase six-fold to €686 million per year by 2033. By then, women's club sponsorship could be worth €295 million and media rights may grow sevenfold to €256 million. The number of women's soccer fans could double to 328 million over the next decade.
UEFA also spoke of women's soccer attracting a "diverse, progressive and young fan base" and being "inspirational, female-empowering and family-friendly". In an effort to capture the market, brands such as EA have also added women's soccer clubs to their products in an effort to create an equitable user experience.
Brands like EA are also adding women's soccer clubs to their products
The women's sports market is in its infancy, with smooth development of various businesses and huge potential for incremental growth. Benefiting from multiple factors such as audience size growth and military expansion, the development of women's sports is expected to accelerate, and the certainty of expansion has increased.
