NWSL's Soaring Valuations: The Next Frontier for Sports Investors and Brands?

NWSL's Rising Tide

Every now and then I like to put on my investment hat to find emerging value buys in the market - ENTER the NWSL! In January, I sat in a conference room in Vegas (CES) listening to Andrea Brimmer, Chief Marketing and PR Officer of Ally Financial, and Sandra Douglass Morgan, President of the Las Vegas Raiders, as they discussed the opportunities and challenges of investing in women in sports.

Welcome to the whirlwind world of women's professional soccer in the US

The National Women’s Soccer League (NWSL) is smashing through expectations and setting new benchmarks for success. Recent franchise sales, skyrocketing valuations, and an ever-widening fanbase should be enough to catch the attention of even hardened skeptics.

In parallel, Major League Soccer (MLS). As we all gear up for the global spectacle of the World Cup 2026, it's clear that soccer – both men's and women's – is on an unstoppable rise in the U.S.

So I pose two questions:

• As an investor, is it better to dive into the deep end with an existing NWSL franchise, or to chart new territories with an expansion team?
• And for brands pondering where to place their bets, is now the time to buy into the NWSL?

NWSL Valuations

Before you place your chips, let’s take a quick look at the recent activity in the NWSL. We've witnessed some jaw-dropping moves in the NWSL that have investors and fans alike doing a double-take:

1. Angel City's Celestial Ascent: On the lookout for new owners at a valuation north of $150M, this club isn't just playing in the league; it's setting the league on fire with the highest revenue at $31M.
2. San Diego Wave's: This team made a splash with a sale at $113M, rewarding Ron Burkle with a staggering 56x return on his initial $2 million expansion fee in less than three years. That's what we call riding the wave to success (couldn't resist)!
3. Seattle Reign's Golden Goal: Sold for a cool $58M, turning a neat 16x return on investment for the OL Groupe since their $3.5m acquisition in 2019.

Sponsorship Revenue Dynamics

The 2024 season started March 16th and its roster expand to 14 teams with the addition of Bay FC and the re-entry of the Utah Royals. This expansion coincides with the league initiating its new domestic broadcast agreements, collectively valued at a staggering $240 million over four years, with prominent networks such as Amazon, CBS, ESPN, and Scripps. These deals represent a monumental increase, by forty times, over the league's prior contract's annual value, according to analysis from Pro Sports Media.

Sponsorship revenue within the NWSL has experienced impressive growth, 4x since 2021 to reach an annual total of $24.5 million across its partnership portfolio, as estimated by Luscid. This surge in league-level sponsorship income is supported by ten official league-wide partners, including high-profile brands such as Deloitte, Nationwide, and Delta Air Lines.

Key Brands Are Buying Into the NWSL

The league has also welcomed new partners since the beginning of 2023, including Google Pixel, Adobe, and EA Sports. Among the NWSL’s most significant and enduring partnerships are those with Nike and Ally Financial, with investments estimated to be around $35 million and $20 million, respectively. Nike’s agreement, extending into 2030, is particularly notable as the league's most substantial sponsorship deal since its inception, highlighting the long-term commitment between the NWSL and the sportswear giant.

With many of these sponsorship agreements set to expire in 2024, the NWSL finds itself in a strong position to negotiate enhanced terms, bolstered by the increased exposure and credibility afforded by its lucrative broadcast arrangements and overall growth in key commercial areas (Source Pro Sports Media).

The league has seen significant investment in healthcare partnerships, with half of the NWSL teams holding front-of-shirt deals with healthcare providers. This trend not only emphasizes the role of women's sports in promoting health and wellness but also highlights the diverse sponsorship landscape within the league. Bay FC's front-of-shirt sponsorship with Sutter Health, worth approximately $2 million annually, stands as the league's highest in this category.

Meanwhile, the 2023 champions, NJ/NY Gotham FC, command the highest average annual deal value across their sponsorship portfolio, just under $450,000, showcasing the varied yet substantial commercial appeal across the league’s teams, as detailed by Luscid's insights.

The $1 Million Question

Imagine we're at the helm of a forward-thinking brand, ready to place a $1 million bet on the National Women’s Soccer League (NWSL) as a sponsor.

At this stage of the league, investing $1 million into the NWSL as a sponsor is more than a financial commitment; it's a statement. It says we believe in the power of women's sports to draw crowds, inspire fans, and deliver compelling content. But what does this investment look like in practical terms? Let's break it down:

1. Media Rights Agreement Growth: The new agreement is 40 times greater than the previous one.
2. Viewership Growth Rates: Year-over-year increase on CBS is 41%, and streaming audience growth on Paramount+ is 83%.

We'll make some (fun) assumptions to simplify the analysis:

• The media value growth mirrors the viewership growth rates.
• The base media value for sponsorship is directly proportional to the viewership and the value of media rights.
• The PR media impressions' value increases linearly with the overall media value.

Financial Model Assumptions

Initial Investment: $1,000,000 (for the duration of 2024 to 2027)

Annual Growth Rate in Media Value: 41%

Contract Term: 4 years

PR Value Multiplier: This is an additional value from PR and media impressions. Assuming a conservative 10% of the annual sponsorship value.

If a sponsor invested $1,000,000 into an NWSL sponsorship deal from 2024 to 2027, the potential media value of that deal, factoring in the growth rate of the league in terms of viewership and the additional value from PR media impressions, would be approximately $13.47 million over the 4-year period (lots and lots of assumptions).

1. Visibility: Our brand could be everywhere – from jerseys to stadium banners, and across digital platforms where the league's passionate fans spend their time. With the league's games being broadcast across major networks and streaming services, our logo could travel from coast to coast and beyond.
2. Engagement: Early-days sponsorship opens the door to unique content creation opportunities. Imagine leveraging player stories, behind-the-scenes access, and the raw emotion of the game to create compelling narratives that resonate with fans on a personal level.
3. Community Impact: Aligning with the NWSL allows us to tap into a community passionate about social issues, including gender equality and empowerment. It's an opportunity to amplify our brand's values and engage with the community on a deeper level.

So, What Would You Do?

As we circle back to the heart of our exploration, the two questions that sparked this analysis:

What's your take on investing in and sponsoring the NWSL? Are we looking at a golden opportunity to shape the future of sports, or are there cautionary tales and considerations that we must heed? Please share your thoughts, experiences, and forecasts.