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The writer was formerly a senior researcher at Harvard Business School’s Institute for Strategy and Competitiveness
Megan Rapinoe, one of the highest paid female footballers in the world, recently announced her intention to retire after the 2023 FIFA Women’s World Cup. Since her debut in 2009, the landscape of women’s sports, including the National Women’s Soccer League, has undergone significant changes.
From football to tennis to basketball, the sector has experienced explosive growth, shifting from grassroots-driven to attracting substantial commercial investments. The Women’s National Basketball Association is projected to generate revenues of up to $200 million this year, a 100% increase from 2019. Similarly, the NWSL’s revenues have grown by 33% this year. In 2022, sponsorship in women’s sports, particularly in UEFA, FIFA, and World Rugby, has more than doubled.
Women’s sports, once overshadowed by men’s leagues, are now attracting a new and lucrative fan base. Athletes now have increased visibility on social media, providing them with a direct connection to fans who seek more engagement. Investors have recognized this trend and are seizing the opportunity. For instance, private equity group CVC acquired a 20% stake in the Women’s Tennis Association, resulting in the establishment of a new commercial subsidiary called WTA Ventures. Additionally, the NWSL recently announced the formation of a team in the San Francisco Bay Area, backed by a group led by global investment firm Sixth Street, with Sheryl Sandberg among the investors.
This global interest in women’s sports is evident, as seen from the $580 million investment in India’s Women’s Premier League of cricket, along with a $116 million broadcasting deal over five years with Viacom.
However, unlike men’s leagues, women’s leagues are increasingly financed through venture capital and special purpose vehicles. For example, the WNBA raised $75 million in 2022 at a valuation exceeding $1 billion. Angel City FC, a football team based in Los Angeles, was valued at $100 million after its series A funding round. League One Volleyball also secured $16.75 million in a series A funding round. Investors like Kara Nortman, managing partner at global sports venture fund Monarch Collective and founder of Angel City FC, seek opportunities in nascent leagues that require hands-on capital and have meaningful value to stakeholders. Notable celebrities such as Natalie Portman, Alexis Ohanian, Jennifer Garner, Christina Aguilera, and Eva Longoria have joined in these investments, leveraging their star branding expertise.
Nortman aims to invest in stable teams and leagues with high consumer demand and a promising media revenue cycle. A “digital-first” approach from the beginning, focused on social media, online advertising, and fan networks, is crucial. The recent hiring of Caiti Donovan, who played a significant role in Spotify’s explosive growth, as the head of growth strategy for the WNBA, exemplifies this strategy.
As investment levels in women’s sports reach record highs, the interests of fans and financiers are aligning. Nortman describes these investments as a form of stakeholder capitalism, recognizing the cultural significance of women’s sports. Rapinoe’s career witnessed this commercial transition, and future generations will experience a vastly different playing field.
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