the global sports market…

…is advancing to an industry with surging economic relevance. Recent developments have seen the sector grow from $468.61billion in 2022 to $512.12 billion in revenues in 2023, notably outpacing the trajectory of the global economy. By 2027, this figure is anticipated to ascent to a $623.63 billion. Unsurprisingly, the opportunity-lurking investment community increasingly recognises sports as a viable asset class.

Private investment in the sector is hardly novel. But beyond high-profile domains such as Formula 1 and US basketball, a spectrum of other sports including football, volleyball, and rugby are now drawing external investment. This transformation is reshaping the industry, converting it into a more resilient and commercially driven platform, guided by economic macro trends just like any other sector.

The unique attributes of sports: non-substitutability, non-replicability, and the undeniable allure of clubs’ brand value are undoubtedly appealing features that captivate investors.

But...sport is not a standard business.

Sport conventionally defied the norms and governance arrangements of traditional business structures. And many experts, fans, and sports communities question the legitimacy of investment into a sector that, at its core, should be a realm of aesthetic appreciation and passion.

The question arises: Do we have to safeguard sports’ intrinsic purpose, or must we acknowledge the industry’s commercial dimension and endeavour to channel investments so it’s deployed to improve spectator experience?

A candid acknowledgement is that most sports aficionados harbour an innate aversion to the intrusion of investors as such intervention may estrange the essence of sports.

Growing investment in clubs, sport agencies, media and sponsorship rights, tickets, memberships, merchandise, data, and wagering rights bears risks conferring not only future revenue entitlements but also a degree of influence over sporting calendars, regulations, and commercial rights.

Clubs are essentially incentivised to “overproduce”, given the need to generate profits. This shift means more and heightened performance by players, neglecting their well-being and escalating health risks due to gruelling schedules.

Additionally, as investments focus on high-return sectors, smaller clubs often struggle to remain competitive, relying on public subsidies or grassroots support due to underfunding. Once cherished for its authenticity, tradition, and unquantifiable worth, the sports industry gravitates towards financial outcomes, shifting from the scoresheet to the balance sheet. Fan communities are not likely to align with investor-driven agendas.

Sports is a form of human expression and experience – a conduit for communications and passions, rather than a mere component of an investment portfolio. Sports uplifts our spirits, reflect our identities, and provide insights into our personalities.

If we allow the transformation of the sports economy, we will witness the deep-rooted history of global sports gradually eroding and risking to lose the democratic essence of the beloved discipline we cherish.