Athlete investors

Once upon a time, sport was just a game. A game played for fun or very little financial return. Athletes were heroes for the weekend then blended back into society and, when their sporting careers were over, they necessarily began new ones back in the rank and file (if they did not have one already).

Fast forward to the modern day and, following the input and innovations of some very clever marketers, media men and of course some visionary sportsmen and women, sport began its merger with entertainment, and its steep upward curve towards big business. Along this trajectory,?rights holders became brands but the real beneficiaries - at the very top at least - were the athletes. Gone are the days of having to run a pub or drive a taxi when you hung up your boots.?Now it is about which chain of pubs to buy or which online taxi business to invest in.?

The age of the athlete investor is upon us. In fact it has been for a while. Ever since sports contracts hit six figures in the 70s, athletes have had significant disposable income to play with and looked to – or been advised to – invest as means to securing their financial future. At the time – and until fairly recently – this investment was largely directed towards traditional industries like real estate, and manufacturing. Some good sportsmen, like Robbie Fowler, made good investments, some greats like Pele made terrible financial gaffs and some, such as former Milwaukee Buck, Junior Bridgeman did better outside sport than they ever did in it.

The modern generation of athlete investor is different. The riches on offer across elite sport have skyrocketed, propelled by broadcast revenues and an increased level of visibility through digital channels and social media and this has turned the athletes into brands with global fanbases. Players are richer, more digitally savvy and more connected to both big business and the general public, in tune with the potential of innovation and with a greater sphere of influence. This makes them highly appealing targets for businesses and funds looking for investment as they bring not only wealth but also media attention and elite performance know-how.

Increasingly, we are seeing sports teams and leagues turn to athlete investors, creating a web of financial connectivity across the sports landscape. To give you just a few examples, we’ve seen Jordan & JT invest in Leeds United and Rory McIlroy flirt with Manchester United after joining an A-List investor group at F1s Alpine Team, that includes Anthong Joshua, Trent Alexander Arnold, Juan Mata, Travis “Taylor Swift” Kelce, Patrick Mahomes and Wrexham’s little know owners, Ryan Reynolds and Rob McElhenney. Mahomes’ investment adds Alpine to an impressive Kansas-centred sports’ portfolio that includes soccer and baseball teams, along with a Pickleball franchise, where he recently joined the likes of Naomi Osaka, Tom Brady & LeBron James as team owners. And finally, to bring us back to football, Brady & LeBron also hold minority stakes in Birmingham City and Liverpool respectively.

This selection – and there are many more we could highlight – provides an indication as to what is driving this sporting crossover. First and foremost, athletes – like all good investors - are backing properties with promising growth prospects. ?The Premier League is the world’s most popular sports league, with its global appeal and the riches on offer showing no sign of waning. This makes teams outside the elite, with potential for development like Leeds United and Birmingham City and (dare we say it Wrexham), appealing investment options. Reynolds and McElhenney are doing a fantastic job of engaging with Wrexham’s local community and milking the narrative opportunity, but you can bet their many bottom dollars that their interest was underpinned by the potential returns of the Premier League’s promised lands.

Likewise, the glut of celebrity/sports investment in Pickleball stems from the game’s potential – it is America’s fastest growing sport, with participation set to grow almost ten-fold by 2030 so getting in early with the newly launched Major League Pickleball seems like a no brainer. Even F1, an established global sports property, is drawing investor attention now due to a growth in popularity on the back of Netflix’s Drive to Survive series and an improved digital strategy.

Athletes are also taking a greater interest, and playing a greater role, in what they invest in, looking to back solutions to issues they face in their careers as NBA star Steph Curry did with AI Home Fitness brand Tonal, where he joined a roster of athlete investors that includes Serena Williams and Michele Wie. Similarly, the NFL Player’s Union recently chose to invest in Chelsea FC Sponsors, Infinite Athlete due to the commercial opportunities their AI powered tech can bring for their members.

We are also seeing athletes coming together across sports – as with the Ben Stokes backed, cricket & footballing collaboration, The Players Fund – to target investments across sports technology and to help advise the wider athlete community on the inherent risks and rewards so they can be better prepared when they decide to invest. We are even seeing the rise of the investor-endorsement relationship where sports tech businesses are offering athletes equity as part of a deal to promote them.

Sports teams and technology businesses are a great fit for athlete investment portfolios – both for the returns they offer but also, importantly, for the athletes own personal brand, which is an asset in itself that needs to be nurtured and protected. Sports teams offer the excitement of competition and technology start-ups can align with values such as innovation and sustainability.

The role - and responsibility – of athletes in funding the future of sport is greater than ever and will continue to grow as long as their influence in society and the riches involved continue to do likewise. With streaming platforms and social media driving elite sports global appeal, there is no chance of either’s growth slowing any time soon.

The Sports TEC Ramble comes from the weekly musings of our consultants?Kevin Bain?&?David Wright?on all things sport and technology.