We believe a series of global macro tailwinds will help drive value creation across the TMT sector. Additionally, the sports industry offers its own secular trends that will further support significant value creation across the asset class. Below is a round up of industry news highlighting some of these themes and related transactions.
- The National Football League (NFL) has expanded its partnership with YouTube to showcase players' personalities and connect with diverse audiences by using YouTube’s global platform to reach international fans.
- The NFL sees YouTube as an opportunity to complement its core game footage and highlight different perspectives through content creators from various fields.
- The NFL's existing success on YouTube has given the league confidence to invest further in the platform to grow the league's following, potentially leading to increased ticket sales, merchandise purchases, or engagement with sponsors.
- MLB's emergency measure to seize control of the San Diego Padres' local TV product and transition it to MLB Media has resulted in impressive audience-retention numbers. 97% of the fan base managed to stay connected after the platform switch, with ratings consistent with the team's performance on the previous RSN.
- MLB Media, led by Billy Chambers, secured carriage with major operators such as DirecTV, Spectrum, Cox, AT&T U-verse, and Fubo, expanding the Padres' local reach by over 2 million households.
- Advertisers have responded positively to the MLB-helmed games on the new SPDA channel. The inventory for revenue-generating commercials has been populated by national brands, while work is being done to reintegrate local sponsors. The success in San Diego suggests that transitioning to a league-controlled platform could be a viable long-term solution for teams facing RSN challenges.
- The St. Louis Blues NHL franchise has partnered with technology firm Credenza to create the 'Bluenatics Passport,' a universal fan ID using Web 3.0 technology. The passport will track fan interactions online and at the venue to deliver real-time benefits such as exclusive offers and access to experiences.
- The 'Bluenatics Passport' will be integrated into the existing Bluenatics fan application and aims to provide fans with a more direct connection to the team. The initiative also includes gamification elements where fans can earn rewards for their activity or engagement with team sponsors.
- Credenza's blockchain technology will ensure fan identity verification and could potentially allow the passport to be exported to other metaverse environments.
- The NBA playoffs were the most-watched in the past five years, averaging 5.47 million viewers across ABC, ESPN, and TNT.
- The five-game series between the Denver Nuggets and the Miami Heat in the Finals averaged 11.64 million viewers on ABC, with the Nuggets' title-clinching game reaching 13.1 million viewers, a 1% increase compared to last year's Game 5.
- The earlier start times for the Finals may have contributed to increased viewership, as the NBA moved them 30 minutes earlier than previous series. The NBA games dominated TV ratings and social media engagement, with billions of views and increased international viewership through the NBA App. Regular-season attendance also reached a record high for the NBA.
NWSL Attendance Jumps 48%, CBS Viewership 21% (Value of Live Content / Rise of Women's Sports)
- NWSL's average attendance has increased by 48% at the halfway mark of the 2023 regular season compared to the previous year, indicating a growing fan base and interest in women's soccer.
- Total viewership on CBS has risen by 21% year-over-year, while unique streaming viewership on Paramount has increased by 50%, highlighting the growing popularity of NWSL matches across different platforms.
- The league's successful performance has led to record-breaking ticket sales for certain teams and increased hopes for higher media rights fees, with CBS paying the league $1.5 million annually. The NWSL plans to expand to 14 teams in the next season but will face competition from the upcoming USL Super League.
- LaLiga has signed a five-year deal with sports tech firm Play Anywhere to integrate real-time interactive fan experiences into its live and on-demand coverage.
- Play Anywhere's AI technology enables the addition of interactive advertising, ecommerce, gaming, and betting capabilities to LaLiga's digital content.
- The partnership aims to create new revenue streams, enhance commercial partnerships, and deepen fan engagement through features such as in-game competitions and special offers activated through QR codes.
- SailGP has extended its technology partnership with Oracle for three more years, with Oracle becoming the title partner for the Los Angeles Sail Grand Prix. Oracle will provide cloud services to power a new fan engagement platform called 'The Dock'.
- 'The Dock' is a Web 3.0-integrated fan loyalty program that offers personalized and exclusive content, prizes, and rewards to registered users.
- Oracle's technology, including Oracle Customer Experience (OCX) and Oracle Cloud Infrastructure (OCI), plays a vital role in SailGP's logistical, operational, and fan engagement efforts. OCI powers data analytics for team strategy and augmented reality broadcast graphics, while OCX drives fan loyalty through 'The Dock'. SailGP has also secured broadcast partnerships with ITV in the UK and Warner Bros. Discovery in New Zealand for wider coverage of its events.
- Formula One teams are rejecting offers of "almost billions" from potential investors, indicating the significant increase in team valuations within the series.
- The valuation of teams has grown exponentially, with previous sales of teams for as low as ￡1 now being offered almost billions. The commercial strides of Formula One have contributed to the strengthening of the business platform.
- The rate of growth in Formula One is evident from the difference in valuations within just three years, but Formula One CEO Stefano Domenicali is cautious about expanding the grid and believes that ten teams are sufficient for creating the show. The focus is on procuring the right entrant for Formula One rather than simply increasing the number of teams.
- Qatar Investment Authority (QIA) is purchasing a 5% passive minority stake in Monumental Sports & Entertainment, the parent company of the Washington Wizards and Capitals, marking the first time a sovereign fund has invested in major U.S. team sports. The deal values Monumental at $4.05 billion.
- The investment reflects the increasing difficulty for wealthy individuals to acquire U.S. sports teams outright due to rising valuations. QIA, with over $450 billion under management, is one of the world's largest sovereign wealth funds and already has investments in the U.S.
- Monumental will maintain operational control, while QIA will not have a board seat or voting power. The investment will support growth in existing properties and future acquisitions, and it aligns with the NBA's expanding approval of private equity and institutional investments in sports.
- Maple Leaf Sports and Entertainment (MLSE) chairman Larry Tanenbaum is reportedly close to selling a share of his stake to pension plan Omers, in a deal that values MLSE at over US$8 billion. Tanenbaum owns 25% of the company and is expected to part ways with an undisclosed portion of his stake.
- Omers is a pension plan representing Ontario-based municipal employees and has significant net assets of over CAN$124.2 billion.
- The transaction would require approval from the NBA and NHL, and MLSE's other shareholders, Rogers Communication and Bell Canada, have the right of first refusal to purchase any shares being sold. MLSE owns teams such as the Toronto Raptors (NBA), Toronto Maple Leafs (NHL), Toronto FC (MLS), and Toronto Argonauts (CFL).
- Bahrain’s sovereign wealth fund has tightened its control on McLaren, buying the shares owned by Saudi Arabia and investment manager Ares, paving the way to recapitalise the supercar maker in the coming months.
- Mumtalakat, which was already the controlling shareholder, said on Thursday it had bought up the preference shares owned by Riyadh’s Public Investment Fund and Ares. It did not disclose the financial terms of the deal.
- The pair invested ￡400mn in July 2021 as part of McLaren’s long-running efforts to raise cash.
- The W Series, a women's motor-racing championship, has entered administration after failing to secure necessary investment or find a buyer for the business.
- The UK-based Evelyn Partners has been appointed as the administrator and has made the one remaining staff member redundant.
- The W Series had to curtail its 2022 season due to a lack of funding, resulting in the cancellation of the final three races and substantial debts owed to creditors. The administrators will explore options to restart the series in the future and are seeking expressions of interest in the business and assets.
- The combined revenue of Europe's top five soccer leagues (Premier League, La Liga, Bundesliga, Serie A, and Ligue 1) increased by 10% to $18.78 billion during the 2021-22 season, indicating a recovery from pandemic-related challenges.
- However, rising wage costs resulted in a drop in aggregate operating profits by $1.97 billion since the 2018-19 season, leading to an overall loss of $353.8 million.
- The English Premier League (EPL) was the top-performing league with a record revenue of $6.99 billion, while the Women's Super League (WSL) in the UK experienced significant growth, with a 60% increase in revenue to reach a record sum of $40.81 million, driven by new broadcast deals.
- Andy Kohlberg, an American former tennis player, will become the largest shareholder of Spanish soccer club Real Mallorca after acquiring shares previously owned by Robert Sarver and other investors.
- Kohlberg was part of a consortium that acquired Real Mallorca in 2016, and the total investment at the time was worth $21 million.
- Kohlberg, who has been the club's president since the takeover, will now take majority ownership of Mallorca and plans to maintain the club's growth strategy, including modernizing the stadium and aiming to be a top-ten club in all aspects of business and sports.
- DraftKings has made a $195 million all-cash offer to acquire the US division of Australian sportsbook PointsBet, entering competition with Fanatics for the deal.
- Fanatics had previously made a $150 million cash bid for PointsBet's US business, with a shareholder vote scheduled for June 30.
- DraftKings aims to increase its revenue and marketing share and disrupt Fanatics' plans to establish itself in the sports betting space, leveraging its scale and potential synergies from the acquisition.
- NFL quarterback Aaron Rodgers is allowing fans to invest in Online Sports Database, a startup he co-founded with actor Ryan Rottman, which aims to be the IMDb of the sports market.
- The company has raised $4 million so far and plans to raise an additional $1.5 million through a crowdsourcing campaign.
- Online Sports Database provides athlete stats and information on endorsements, business ventures, personal interests, and charities. Rodgers has also co-founded RX3 Growth Partners, a venture capital firm that has invested in various companies.
- Sports tech investing funds raised a record $2 billion in the first quarter of 2023, indicating strong deal-making potential for the rest of the year and into 2024, according to a report from investment bank Drake Star Partners.
- Fan engagement, AI, ticketing, and venue management are favored areas for sports tech investment, with expectations of increased capital deployment and "buy and build" type transactions.
- The first quarter of 2023 saw robust activity in sports tech, with 60 mergers and acquisitions, including notable deals such as Penn National Gaming's acquisition of Barstool Sports and Zimmer Biomet's purchase of Embody. Early-stage startups received. the majority of venture capital funding, with Zwift's $620 million funding round being the largest. The recovery of publicly traded sports companies also bodes well for sports-tech investing, with digital media and content businesses leading the way.
