The 1st Women's Sports Fund (and how it will alter the industry)
The 1st Women's Sports Fund (and how it will alter the industry)
Analysis of a new $100M women's sports fund and the Final Four breaking records (showing the power of NIL).
With the women’s Final Four coming off of a record weekend (and several big-time stories from last week).
I want to take a look at two things:
The landscape for investing in women’s sports
Thoughts around the growing opportunities
Sports are in the early stages of rapid growth and women’s sports are going to play a large role in that expansion.
Let’s Dive In 👇
$100M Women’s Sports Fund
Last week, we had a major announcement regarding venture capitalists Jasmine Robinson and Kara Nortman.
They announced the closing of the Monarch Collective’s $100 million fund — which is focused on investing in women’s sports teams and leagues.
“There’s an opportunity to get in at what should be historically low valuations in teams and leagues, that are at the beginning of a media rights cycle—which is a very well-understood revenue stream,” Nortman says. “So, if you’re disciplined, if you have the right fund size, if you’re showing up and actually doing work, you can get venture-like returns with very low risk.”
And this statement makes sense given that:
Ally Financial recently signed a multimillion-dollar deal across ESPN networks and requires 90% of the ad buy to focus on women’s sports.
Women’s pro sports sponsorships grew 20% year-over-year in 2022.
Google signed a multi-year partnership with The Athletic that promises to double the amount of women’s sports coverage with a focus on soccer and the WNBA.
The Monarch Collective is the next major step in the evolution and advancement of women’s sports.
And they’re not the only ones…
A few weeks ago, the Atlanta Hawks launched a fund aimed at supporting women and minority-owned venture companies in sports, media, and entertainment.
As we continue to see more money headed toward sports, the women’s game is certainly at the top of my mind (and many others).
Investing in Women & Sports
What is a fund like The Monarch Collective actually going to invest in?
At $100M, they’ll have the ability to buy minority ownership stakes in teams and leagues.
Nortman and Robinson said they will initially consider investing in U.S. women’s soccer teams as well as in international women’s basketball, cycling, and rugby leagues.
Here are some they’ll take a look at:
To me, the NWSL valuations feel a little high based on current revenues — hovering around $50M for the most part.
The Washington Spirit sold for $35 million earlier this year (10x the amount the OL Reign sold for in 2019)
NJ/NY Gotham FC recently raised funding at a $40 million valuation.
Just yesterday, Sixth Street Partners is investing $125M for an expansion franchise in San Francisco.
But then again, maybe the valuations are valid…
The NWSL’s media rights deal with CBS ends after 2023.
Insiders expect the next NWSL media rights deal to increase exponentially from the $4.5 million committed by CBS in 2020.
And that could make sense considering…
The NWSL's counterpart on the men's side (MLS), announced a 10-year, $2.5 billion deal with Apple last year.
Whatever the Monarch Collective decides to invest in — it’s a step in the right direction for women’s sports.
Massive Chance For Females
One of the biggest opportunities I see…
Females jumping into the founder seat and starting sports companies.
There’s very little competition for funding (and naturally, you’re going to garner support from many other females).
There are now funds in place for two separate areas:
supporting women’s sports
supporting female founders
I hate that we even have to separate into niche venture areas like (women’s sports, women’s funds, etc).
But the fact women received just 2% of the venture capital (VC) deployed in 2022 has created demand on the other side of the table.
There are a lot of females in sports marketing (and also ironically at sports venture funds).
But not many are jumping into the founder’s seat.
It’s a MASSIVE opportunity.
Women’s Final Four Analysis
The women’s basketball Final Four put up historic numbers last weekend.
NCAA president Charlie Baker even suggested that the women's tournament could get its own TV deal next year.
Estimated at $85 million in 2025 — would be a 1400% increase from the current contract.
NCAA WBB 2022 vs 2023 viewership numbers (in millions)
And let me tell you something about the viewership…
It’s not because of the NCAA, media networks, or brands.
It’s 100% because of the players and a coach (specifically Caitlin Clark, Angel Reese, and Kim Mulkey).
Fans are player-driven — millions of people tuned in because word-of-mouth spread like wildfire about Caitlin Clarks 40 point games.
And whatever you think about the crazy outfits, trash-talking, and horrible refereeing is up to you…
The bottom line is we had “player characters” in this year’s women’s basketball tournament and they drew the attention.
I would argue much of this stems from social media and NIL.
Why?
Because these female athletes are now incentivized to grow their followings to make more money (and in return, we get more “characters” which equates to viewers).
And these “characters”…Caitlin Clark, Angel Reese, Hailey Van Lith, etc. are all returning next season.
Looking Ahead
Sports are going to continue to get more entertainment-driven.
If you don’t like it — then don’t watch it.
However, I do recognize there will be side effects.
It starts with the players and their drive to grow social media accounts to make money from NIL.
Caitlin Clark added a ridiculous amount of followers since March Madness (over 400,000 new) — which equates to big dollars in NIL.
All-in-all I think this movement is a net positive for women’s sports and will create lots of opportunities in the space.
Although I will admit there are a few areas I’m watching closely:
What the WNBA is going to do — as there’s more money in the college game currently.
The deep polarization that even simple trash talk brought to the Women’s Championship Game.
The extreme actions of athletes and coaches to be seen, grow their social media accounts, and make money.
Attention is the name of the game — and Iowa vs. LSU provided plenty of that (both before, during, and after the event)
It’s going to be fun to look back in 10 years and remember when women’s sports started to turn the corner.
I’m also curious to see if any more women's sports funds pop up.
Podcast 🎙
Today’s guest is Ahmad Nassar, Exec. Director of the PTPA (Professional Tennis Player’s Association).
Ahmad was previously the founding CEO of OneTeam Partners (valued at $1.9 billion) before selling his stake and starting the PTPA.
You’ll enjoy this episode as we discuss:
rise of team sports vs individual sports
how tennis created equal prize money for men and women
players’ rights, mental health, and trends to watch in sports
Check out the podcast episode here.
Thanks for reading (and listening today)!
Have a great Wednesday.
Peace,
AP
Sources:
https://www.espn.com/soccer/united-states-nwsl/story/4781129/nwsl-needs-higher-attendance-to-make-money-how-to-do-it
https://equalizersoccer.com/2019/12/19/ol-groupe-acquires-reign-fc-nearly-4-million-dollar-valuation-nwsl/
https://www.cnbc.com/2023/03/04/for-womens-sports-the-media-buys-are-becoming-a-big-deal.html