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Good Thursday Morning. Here’s the rundown of this week’s Sports Business Playbook:

• 📰 This Week’s Topic: Why the US Women’s National Team’s loss in the World Cup is actually a good thing for augmenting the already fast-paced growth of women’s soccer globally.

• 🍸️ Impress Your Friends at Cocktail Party: Want to show off your sports knowledge in a public setting but don’t have time to read the deep dive? Hit the “Impress Your Friends at Cocktail Party” section at the bottom for a CliffsNotes of this week’s topic

• 🤯 “Whoa of the Week”: A record setting volleyball match

• 💪 Weekly Reminders that Sports are Awesome: A great story of an underdog making an NFL roster

Hey team,

The FIFA Women’s World Cup recently ended, and a new champion, Spain, was crowned after defeating England 1-0 in the final.

Right now, most of the focus is rightfully on the inappropriate behavior and controversy that marred the La Roja victory, which has cast an ugly shadow over an improbable run to the title and also brought to light much of the rampant sexism and misogyny that still permeates women’s sports.

Looking at the business aspects, though, this Women’s World Cup was a massive success.

• Tournament revenue was a record $570 million, which enabled FIFA to break even for the first time on the WWC, according to FIFA President Gianni Infantino

• Total attendance was nearly 2 million, and average match attendance was nearly 31,000 — up 42% from the last WWC in 2019

• There were 3.2 billion views of WWC content on social and digital

These numbers are exceptional.

And they’re even more impressive given the headwinds the tournament faced:

• Challenging match viewing times for most of the world due to the Australia/New Zealand time zones

• The US Women’s National Team’s absence from the later stages due to its loss to Sweden in the Round of 16, the USWNT’s earliest exit ever in the WWC.

As an American and a USWNT fan, I was incredibly bummed to see the US get bounced early.

[Stephen A. Smith voice] : HOWEVA! (oh yes, I used this bit two weeks in a row)

In my opinion, the United States’ early exit was the best thing that could have happened for the long-term growth of the women’s game.

I’ll explain more.

Early Minutes

First, to level set where we are:

1. 2023 has been the year women’s sports moved directly into the cultural spotlight

2. The groundswell of support and business growth has attracted top-shelf investors who are looking at women’s sports as a viable business opportunity. This momentum creates a self-perpetuating market that continues to grow.

Despite these positive developments and the growth of the NWSL in the US, women’s soccer has been mostly an afterthought for the traditional soccer-crazed markets. Let’s use the general consensus top five soccer countries in Europe as an example:

• England: The Women’s Super League is probably the most well developed, with a fully professional rating and 12 teams. Several of the major powers (i.e., Chelsea, Manchester City, Liverpool) have women’s clubs, but a number of others (i.e., Newcastle United) have only recently upgraded their team to full-time professional ranks and are working their way up the English football pyramid.

• Spain: The La Liga F Primera División has been around in various forms for over 30 years but only became fully professional in 2021, most of the stadiums played in are sub-5,000 seat capacity, and Real Madrid — one of the biggest clubs in the world — only just launched a team in 2020

• Germany: Despite being one of the oldest leagues and Germany’s historical success at the national team level, the Frauen-Bundesliga is still semi-professional and only the top 4-5 teams truly compete on the global scale

• France: The Division 1 Féminine has 12 professional clubs, and the league itself has been ratified by the French Football Federation to be considered professional in 2024.

• Italy: The Women’s Serie A league features 10 clubs and is professional for the first time this year.

You see the term “professionalization” thrown in there a lot. This essentially means that the country’s governing body overseeing soccer has ratified the league as a legitimate entity that will have uniform contract structures, player rights, and commercialization opportunities.

Given the checkered history of how these leagues have historically been treated, this professionalization is a big step in the right direction.

US vs. Them

So, to why the US loss is actually a good thing.

The USWNT has been the dominant force in women’s soccer for nearly three decades, winning four of the nine Women’s World Cups and never finishing below third place until this year.

Much of this dominance can be attributed to the US’ lead in infrastructure and player development/investment over the rest of the world, which can be traced back to Title IX laws passed nearly half a century ago.

Yes, it’s ironic given the past controversies within the NWSL, the equality issues that the USWNT has been fighting the US Soccer Federation on for the last several years, and the general uphill battle that women’s sports have been waging to have a seat at the table.

But, that is the current state of the sport, and the USWNT has capitalized on its structural advantages.

This year’s World Cup signaled that that era of dominance may be coming to a close, though, and here’s why it’s a good thing.

Winning Breeds More Winning

We have a European champion — Spain — for the first time since 2007, and it happens to be in one of the most proud soccer countries in the world.

The runner-up — England — is also a soccer-crazed country that has had a rapid ascent to the top of the FIFA rankings.

The countries are seeing an opportunity open up for their women’s teams to become the dominant ones, and they want to step into it.

This has positive knock-on effects.

As these women bring glory to their countries, their stardom and gravitas grow with their success. This, in turn, elevates the visibility and interest in the clubs they’re playing for in the other three-and-a-half years they’re not representing their countries.

As we have discussed here before, all leagues need stability to grow, and that stability comes from a set of interconnected revenue streams: ticket sales/attendance, sponsorships, and media rights.

Drawing more eyeballs (viewership) and putting more butts-in-seats (ticket sales/attendance) means larger sponsorship opportunities, bigger TV deals, and a flywheel that raises all areas of the sport.

The federations and leagues are fiscally motivated, so they will follow the money and invest in the sport to grow into the business opportunity. For those countries who currently aren’t competitive, they too will also recognize this chance and seek to bring their leagues/infrastructure up to the top levels.

Restarting the Fire

I’m pretty sure the US’ loss in this World Cup is the beginning act of Rocky 3.

They’re the champs and were resting on their laurels despite some fundamental flaws, and a younger, hungrier challenger made them pay for it (the Swedes are Clubber Lang in this analogy).

It’s evident that the days of the US coasting through the World Cup are behind it, and we’ve entered a new era of more parity in women’s soccer.

Again, this is a good thing. It’s competition, and competition creates more effective outcomes.

The type of failure the US experienced this year presents an opportunity for the club and players to start from square one and build a new dynasty (see: US basketball and the Redeem Team in 2008).

For the USWNT, the USSF, and the NWSL, that means continued investment in the academy/player development system as well as the infrastructure for the current players; all of which benefits the global game.

Queue the training montage and return to glory!

Money Moves

Assets often appreciate due to the following factors:

• Strong business fundamentals

• Strong market dynamics (“tailwinds”)

• Strong momentum

For the business fundamentals, there are signs of growth.

While women’s soccer in Europe is nascent, steady progress is being made in the general regular seasons, and there have been massive shows of support in tentpole matches.

This “big game strategy,” as sports data consulting firm Two Circles called it in a report earlier this year, can be both a cross-league match — 91,648 for Wolfsburg at Barcelona in April ‘22 — or two teams within the same league — Arsenal vs. Tottenham drew 47,367 in September ‘22.

The matches themselves put up eye-catching numbers, but they also are proven to have an incremental impact on attendance for the other matches.

In global women’s soccer’s case, the tailwinds are evident here. The success of the WWC this summer, coupled with recognition that the US’ slip-up is an opportunity to don the crown, should mean increased investment and lead to growth across the board in these metrics.

Lastly, momentum. Investment groups are starting to take notice of the business opportunity in European women’s soccer. Two notable examples:

• Victoire Cogevina Reynal has launched Mercury 13, a $100 million fund that is looking to create multi-team global ownership model similar to City Football Group (owners of Manchester City and several other clubs around the world) but in women’s soccer

• Health tech executive and the NWSL’s Washington Spirit owner Michele Kang wants to create a similar model, and her group has already purchased French power Lyon.

These investors are sure to attract more attention, and I wouldn’t be surprised to see institutional capital — say, a venture capitalist who raised a women’s sports specific fund or a private equity firm that already has made a substantial investment in the NWSL — to jump into the fray.

Parting Thoughts

Whenever closing about this topic, I like to share three key reflections:

1. Let’s pay tribute to the people who came before and laid the foundation for women’s sports to ascend to where it is today. There are scores of people who have been saying this for years and working to make it a reality. While many of these contributions went unrecognized and underappreciated, they have forged the path which is now turning upwards.

2. There is still a long road ahead to address the numerous inequities that currently exist in women’s sports, and it’s a struggle for many female athletes today to make a living despite being the best in the world at something.

3. To that point, the ultimate benefit is not returns for wealthy investors, but creating a system that enables women athletes to be compensated what they are due. We’re not there yet, but if these market trends are any indication, it’s coming.

I’ll add one more this time given what’s happened with the Spanish Football Federation. Additional attention globally means better oversight in all aspects of the game. This includes ensuring a safe environment for these women to perform, and accountability for those who violate that safety and/or are abusing their power.

There is unfortunately much more to root out, but my expectation is that a more developed global business around the game means a stronger platform for swiftly eradicating this type of behavior.

Impress Your Friends at a Cocktail Party

Want to show off your sports knowledge in a public setting but don’t have time to read the deep dive? This section is the CliffsNotes of this week’s topic

• Opener: The Women’s World Cup that just finished up was a major business success. Tournament revenue was a record $570 million, total attendance was nearly 2 million, average match attendance was nearly 31,000 — up 42% from the last WWC in 2019, and there were 3.2 billion views of WWC content on social and digital

• Shot: I believe the US’ loss is a good thing for the growth of the women’s soccer business.

• Chaser: The answer to the USWNT’s dominance is here, and we are entering a new era of parity in women’s soccer. That means that additional countries are going to ramp up their programs, and the US will hopefully redouble its efforts to keep pace. All of this competition inherently benefits the global game.

• Chaser: Despite having fledgling leagues, European women’s soccer is starting to show solid growth, and investors are looking to deploy funds to capitalize on this business opportunity

“Whoa” of the Week

Insane, mind-blowing things constantly happen in the sports business world. Here was my favorite of the past week.

1. All of Nebraska turned out for the Cornhuskers’ volleyball team

Weekly Reminder that Sports are Awesome

This newsletter is, of course, mostly centered on the business side of sports and the things that happen off the field. That being said, it’s important to remember why we fell in love with sports in the first place, though.

This section is meant to highlight the amazing things that happened in sports this week that serve as that reminder.

1. Always cool to see the stories of underdogs surviving a grueling NFL training camp and making the team. Meet Tyson Bagent

Thanks for reading! Let me know what feedback you have.

Also, if you enjoyed this breakdown, please consider sharing it with your friends and network by clicking the social media icons at the top of the newsletter.

Until next time, sports fans!

-Alex