Women’s Sports: Unlocking the Next Level with Corporate Sponsors

After more than 9 million people tuned in last weekend to watch the U.S. Women’s National Team take home the gold in soccer at the 2024 Summer Olympics in Paris, we’re reminded how monumental the past year has been for women’s sports.

From incredible performances on the field and the court, to landmark deals across media, infrastructure, and investment, the women’s sports movement is hitting its stride right before our eyes.?

In April 2023, we wrote about why Sixth Street was making the largest institutional investment to date in a women's sports team as we introduced Bay FC , the new Bay Area expansion franchise for the National Women's Soccer League (NWSL) .

Despite a starting point where men’s sports gathered 99% of the economic pie, our thesis was that the data around women’s sports was sending loud and clear signals, and it was only a matter of time before the economics began to catch up.

Here are a few of the milestones that have happened since:

• The NWSL signed a new $240 million media rights deal with CBS Sports , ESPN , Amazon Prime Video, and Scripps Networks Interactive , a 40x step-up in value and a major expansion of the league’s linear TV programming windows.???????
• The NCAA Women’s Final Four drew record-setting ratings, with over 24 million viewers tuning into the final game, surpassing the men’s tournament for the first time.
• NWSL’s Kansas City Current opened the first stadium purpose-built for a professional women’s sports franchise and already has plans to expand capacity by thousands of seats to meet the demands of a season ticket waiting list.
• The NWSL continued to set record-breaking attendance, including 35,038 fans attending the Bay FC vs. Chicago Red Stars at Wrigley Field.
• WNBA (Women's National Basketball Association) ticket sales rose 93% year-over-year.
• NWSL’s Angel City Football Club established a $300 million valuation with new investment from Willow Bay and Bob Iger, marking a clear upward trend in franchise valuations following other investments in San Diego Wave Fútbol Club , Seattle Reign FC , and Chicago Red Stars.
• And, most importantly, superstar athletes across women’s sports continued to achieve new heights as they captivated tens of millions of sports fans with their performances as teams and individuals.

That's a lot of momentum, but that’s not the purpose of this note.

Our message today is a more guarded reminder: women’s sports as a movement has only reached base camp.

Fans, media, investors, leagues, and infrastructure are getting on board. The return-on-investment represented by modern data has entered the bloodstream, and the 99:1 imbalance between men’s and women’s sports economics is starting to shift.

But there are levels upon levels to go before women’s sports reaches its full promise as a business and cultural touchstone, with corporate sponsors holding the key to unlocking that step. The time is clearly now for corporate sponsors to move off the sidelines and get in the game.

With notable and important exceptions, corporate sponsorship lags every other trend in the women’s sports business ecosystem.

There are some reasonable and some less reasonable structural reasons for this. One of the most common refrains is that the data is still too new.

Companies have frameworks and internal models that they don't like to change. That means many brands are relying on historical data (back-dated spots and dots) to evaluate women’s sports.

In the modern era, however, of streaming, social media, and greater global accessibility to women’s sports, that legacy data is virtually meaningless. ?

As investors, this is a familiar problem. Reams of back data might be great to have when making an investment decision, but by the time that data is available, the opportunity to be first is often missed. Bidding for proven assets also inherently involves much greater competition.

Identifying the leading indicators that signal inflecting growth is key to getting involved in any burgeoning trend. As we laid out in our Bay FC investment thesis last year, those leading indicators in women’s sports are screaming green.

Brand leaders and corporate boardrooms should be evaluating women's sports on where we’re going, not where we’ve been.

To understand why corporate sponsors are so important, and why corporates are one of the few remaining structural barriers getting ready to fall, let’s talk about how the economics of sports actually works.?

The Economic Flywheel

The business of sports is a flywheel with three main components:?

I. Fan Engagement

II. Media Investment

III. Corporate Sponsorships

All of these come together to support the on-field product and the player and community experience, which always sit at the center of value for any sports franchise.

I. Fan Engagement: As our friend, advisor, and legendary NBA executive Rick Welts has taught us, sports always starts with the community. Community is the unique element at the heart of every sports business, fostered by the quality of the fan experience. Fans and community sit at the top of the flywheel and fuel everything else around a club or league.

From record-setting attendance to rapid social media growth, fans worldwide are engaging with women’s sports at record-setting levels. They love it, and they want more of it.

The fan engagement component of the flywheel is operating at strength. Aided by advances in accessibility through digital technology, global fans are (and will continue to be) the key driver of the rise of women’s sports.

II. Media Investment: Live content rules. As we’re seeing across soccer, basketball, and more, women’s sports are delivering live content of the highest quality.?

Media companies want to reach targeted and engaged consumer audiences, and women’s sports attracts a highly sought-after demographic. Women’s sports viewers skew younger, more multicultural, and control a larger majority of household spending.

Women’s sports rights have historically lagged men’s because, as we discussed last year, before streaming consumers traditionally didn’t have the freedom of choice they have today: media companies set the schedule for what would be available to watch, and consumers had limited options.

Corporate boardrooms – even at relatively fast-moving media companies – tend to lag consumer trends, and media companies struggled to justify investing incremental dollars without the direct, data-driven evidence of an expected sufficient return.

Now, because of the magic of streaming and other technology, the barriers are gone. The data not only exists but is undeniable. As we’ve seen with recent media deals in the NWSL and WNBA, the media engine is working rapidly to catch up.

But media investment is coming off a low floor. The media component of the flywheel was at a cold start but is starting to accelerate with force.?

III. Corporate Sponsor Investment: This is the last piece of the flywheel and where everyone in and around the women’s sports ecosystem should be focused right now.

Like media companies, corporate sponsors value sports because it provides a direct path to their core consumers. Sports sponsorships grew significantly over the past decade. Last year, the segment represented $7 billion of revenue across the major U.S. sports leagues.

In our post last April, we talked about how 99% of every dollar spent on sports went toward men’s rather than women’s sports. We’re seeing that begin to break on consumer spending, media rights, and other forms of investment.

But in sponsorship, the share of that $7 billion figure hasn’t really moved. It is still heavily, heavily skewed towards men’s sports.

Why?

One reason is that, again, corporate boardrooms aren’t super dynamic by their nature. Most companies, especially large ones, still move much slower than their digital-age consumers.

But there’s more than that. Structural barriers that exist within corporations are substantial.

Here’s one example: Many corporate marketing budgets have historically been organized to place women’s sports in a company’s charitable, or “impact”, arms, rather than in their core marketing budgets.

The Chief Marketing Officer leads men’s sport spending, which represents a major point on the CEO’s agenda; meanwhile, women’s sports go down the hall to the Social Responsibility group.

Structural organization like that is hard to change, but it is happening. Some big and influential companies are leading that change, because the data and the ROI has become too clear to ignore. Early adopters such as Ally and others have received incredible value by being first-movers investing in women’s sports sponsorship.

Instead of women’s sports getting 1% of that $7 billion figure (which will only continue to grow), imagine it gets 10%. The effect that will have on the ecosystem is game-changing – for leagues, clubs, but above all, for players.

We are starting to see some of this – Caitlin Clark signed the largest ever sneaker deal in women’s sports history over the last 12 months. But even that deal pales in comparison to benchmarks on the men’s side.

When sponsors catch up to consumers, and start engaging with women’s sports the same way they do with men’s, the full optimal flywheel effect will be set in motion, and women’s sports will reach an entirely new level.

And it’s coming.

Attendance, viewership, and the new normal of social media are all allowing this generation of women’s sports fans to be more engaged with their favorite players and teams than ever before.

Younger fans increasingly don’t see a distinction between the men's and women's games – it’s all just sports.

Everyone talking about how women’s sports are going to the next level, is in many ways, a self-fulfilling prophecy.

Brands and sponsors slower to recognize this will be forced to play from behind (and spend more to catch up). Leagues, teams, and players will be wise to keep the velvet rope in place, rewarding those who were there first and invested – with real capital and not “charity” – from the beginning stages.

There’s a long way to go, and business growth is never linear. There will be slips and restarts. Once the sponsorship piece starts moving, the path will be even clearer. We’re happy we’re in the game.

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