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

• 📰 This Week’s Topic: Every now and then, it’s fun to look back at a prediction made earlier in the year and see what’s come of it. I wrote in an April article that I believed 2023 was the “year of women’s sports.” 5 months later, I’m bringing you 5 key stats that showcase the hypergrowth that is occurring across the industry.

• 🍸️ 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”: Nice revenue, Man City. You’re still less profitable than the Jacksonville Jaguars, lol.

• 💪 Weekly Reminders that Sports are Awesome: A journey to become the Dallas Cowboys’ kicker

Hey team,

I wrote in a guest piece for Sports Pundit back in April that it can be challenging in the moment to take a step back and realize when you’re witnessing a seminal period in history.

I’m here to help with that.

Momentum for women’s sports has been building for the last several years, and it’s reached a crescendo in 2023. We’re seeing bigger crowds, viewership, and revenues than ever before, and it feels like we are in the middle of a sea change where women’s sports is finally getting its much deserved moment in the limelight.

It started with a massive NCAA Women’s March Madness Tournament, excellent FIFA Women’s World Cup numbers (despite an early USWNT exit), and steady growth from the professional leagues both in the States and around the world.

As I have written about in past editions, a number of high net worth individuals and institutional investors are recognizing this opportunity and pouring money into the industry.

For example, we’ve even seen two $100 million investment funds solely focused on investing in women’s sports emerge this year alone, and financial giant Sixth Street made the largest investment in NWSL history and views the industry as one of the most undervalued asset classes in the world right now.

Yet, skepticism remains.

I’m not going to wade into the political and social elements of why this skepticism exists. Instead, my ask is that we channel the efforts into reviewing objective data and what it tells us.

Here are five stats from five different sports that illustrate that 2023 is the year of women’s sports entering the mainstream.

3.4 million

That’s the average number of viewers who tuned into ESPN this past Saturday to watch 19-year old Coco Gauff win the Women’s U.S. Open final.

For context:

• This figure sets a new viewership record for a women’s major tennis final.

• Viewership for this year was up 92% compared to last year’s final.

• The women’s final received one million more viewers than the men’s final the following day.

This strong number overcame both a full weekend of college football —the US’ second most popular sport — and a Disney-Charter cable dispute that left over 20% of ESPN subscribers without the ability to tune in.

What Can We Learn

In today’s day and age, star power matters, and Coco Gauff is a bonafide star.

In addition to her exceptional play on the court, her presence and personality has solidified her as the heir apparent to Serena Williams as the next great women’s star in the public’s eye.

She boasts nearly 2.5m followers across Instagram and Twitter, is expected to earn over $10 million in off-court endorsements, and her run at the U.S. Open is sure to boost key business metrics in women’s tennis for years to come.

27%

That’s the year-over-year increase in unique viewers of WNBA programming this year. The 36 million total unique viewers is the league’s highest total since 2008, and the per-game viewership of just over 500,000 is up 8% YoY. For context, that’s about on par with what NHL games are averaging the past few years.

Attendance is also up across the league. The per-game average attendance was 6,615 — up 16% and the highest number since 2018.

This bodes well for the playoffs, set to begin this week, particularly if the dream matchup between the league’s top two teams, business catalysts, and budding rivals — the Las Vegas Aces and New York Liberty — happens in the Finals.

What Can We Learn

Skeptics will point out the small scale of these numbers. Compared to the US men’s professional leagues, they are.

This argument misses the bigger picture, though, because it’s assessing newer sports leagues like the WNBA at a point in time and presumed equal level of maturity to the dominant sports leagues that have been around for decades and have been investing in infrastructure for years.

The reality is that the W should be viewed much more like a startup, where growth and signals of continued tailwinds are what matters most.

The league is showing both following a series of key investments in the league and big-market teams and the amount of star power both in the league right now and what’s coming (see: Caitlin Clark).

11

That’s the number of National Women’s Soccer League (NWSL) regular season matches that have had 20,000+ fans.

The US women’s professional league has already broken its season attendance record — over 1 million fans — and there are still four weeks left to play in the regular season.

These figures, along with strong viewership and a marked increase in sponsorship, should result in large increase in its media rights contract — after the current agreement — $1.5 million per year — expires at the end of this year.

What Can We Learn

As we discussed a few weeks ago, women’s soccer/football is expected to experience a huge jump globally following the success of the FIFA Women’s World Cup.

The NWSL has been laying the foundations for this growth the last few years, and the highest club valuation — Angel City FC at $100 million and most recent expansion team fee — $53 million — suggest that there is strong demand for this product. The league is capitalizing on this interest by expanding to 16 teams by 2026, which should lead to even higher fees that raise the profile and coiffeurs of the league.

I have a theory that there is a growth playbook developing for fledgling leagues where they rapidly expand the league’s size at incrementally higher expansion fees in order to fund the league’s operations (see: MLS).

This approach has some risk because it drives up the existing clubs’ valuations to unrealistic revenue multiples, and at a certain point the clubs do need to convert that momentum into actual outcomes when the league can’t expand any further (again, see MLS).

But, in the NWSL’s case, the supply/demand balance remains strong, and it means the existing teams have access to a pool of capital that they can use to grow and reinvest in their players and business operations.

192 million

That’s the global viewing hours figure for the International Cricket Council’s Women’s T20 World Cup in February, according to SportsPro Media.

That figure is up 44% from the 2020 event, and key cricket markets — host country South Africa (130%), India (57%), and the UK (26%) — all saw major increases.

What Can We Learn

Cricket is one of the world’s largest games, with over 2.5 billion fans and over 30 million registered players. Outside of soccer, it’s the world’s game.

Similar to soccer, there is a ton of opportunity for continued growth globally in the domestic leagues. These types of success stories in world tournaments only bolster that opportunity.

Plus, the US is mostly untapped still.

Expansion into the US has already begun on the men’s side, and these figures from the women’s tournament should catch the attention of investors looking for an opportunity.

92,003

That’s the number of fans who attended the Nebraska volleyball team’s match in the university’s football stadium in August.

This figure broke the world record for attendance at a women’s sports event — 91,648 — previously held by a Champions League soccer match between FC Barcelona and Wolfsburg, and it was the largest crowd on hand for a women’s sports event in the US since the USWNT’s win over China in the 1999 Women’s World Cup in the Rose Bowl — also known as the “Brandi Chastain game.”

The “big game” strategy is a tactic a number of women’s sports entities have used to draw attention to their respective games, with the expectation that it will create major buzz, expand reach, and enable the organization to capture a new audience interested in following the sport more closely in the future.

What Can We Learn

Behind soccer, I’m not sure if there is more of a sleeping giant in the United States women’s sports industry than volleyball.

Youth participation is up 15% since 2002 — putting it ahead of basketball as the second-most popular sport — and the college final drew a record 1.2 million viewers on ESPN.

The sport is fast-paced and action-packed, and there have been pro leagues abroad for a number of years where the best players go (interestingly, Turkey has one of the most competitive women’s leagues in the world).

Despite all of this success, the sport has not caught on professionally in the States.

That’s changing.

Prior to 2020, there were no professional volleyball leagues in the US. By the 2024, there could be as many as four:

• Athletes Unlimited

• League One Volleyball (LOVB)

• Pro Volleyball Federation

• Volleyball League of America

Each of these leagues has a combination of institutional and celebrity capital, and they will all be vying for market share. A four-league setup is obviously not sustainable, so we should expect some consolidation in the coming years.

But that does not change the fact that there are strong tailwinds pointing at professional volleyball as a new force to be reckoned with.

The Train Has Left the Station

So, what’s the “net net” (business school/consulting speak for “key takeaways”) of this all?

Stripping away the emotions and subtexts, there are three key principles that this data showcases:

1. When given a platform, women’s sports deliver

2. The recent investments are paying off. A number of major women’s sports entities are showing positive growth numbers, which lays to rest the chicken or egg argument about if the leagues are not worthy of investment due to lack of interest or if they needed investment to drive further interest

3. The arbitrage opportunity is there, and the smart investors are actively looking for them right now, particularly in the United States where the playbook on how to scale a league collectively is becoming more commonplace.

For those who remain skeptical, you are right — there is a long way to go. This is a venture-style investing environment, and there inevitably will be setbacks and failures.

But, I can promise you this: more examples and data points are coming, and 2023 is going to be remembered for when the paradigm shift with women’s sports truly began.

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: I wrote back in April that women’s sports is having its coming out party this year. 5 months later, here are 5 stats to back that up

• Shot: Coco Gauff’s victory in the women’s US Open finals drew 3.4 million viewers, nearly 1 million more than the men’s final the next day. Gauff is a bonafide star and the heir apparent set to carry women’s tennis into the future

• Shot: The WNBA’s number of unique viewers is up 27% year-over-year heading into the playoffs this week. The W also has strong attendance numbers, and a potential Las Vegas Aces-New York Liberty final should continue the league’s upward trajectory

• Shot: The NWSL had 11 matches this year that drew more than 20,000 fans. This, coupled with strong attendance, sponsorship, and an expected increase in media rights, makes the NWSL a prime candidate for growth. Investors are looking to get in on potential expansion teams, and those increasing expansion fees help to further fuel the league’s growth

• Shot: Looking abroad, the International Cricket Council’s Women’s T20 World Cup had 192 million global viewing hours, with major increases in key cricket markets like the UK, South Africa, and India. Similar to soccer, expect the domestic leagues to pick up this momentum, and it does make me wonder if an opportunity is coming for women’s cricket in the US now that men’s cricket has arrived.

• Shot: 92,003 attended the Nebraska volleyball game, breaking the world record for attendance at a women’s sporting event. Volleyball is an interesting sport to watch going forward. There is a ton of youth participation — second-most popular sport in the US — and there are expected to be four professional leagues by this time next year.

• Chaser: So, what are the key takeaways here?

  Takeaway #1: When given a platform, women’s sports deliver

  Takeaway #2: The recent investments are paying off. A number of major women’s sports entities are showing positive growth numbers, which lays to rest the chicken or egg argument about if the leagues are not worthy of investment due to lack of interest or if they needed investment to drive further interest

  Takeaway #3: The arbitrage opportunity is there, and the smart investors are actively looking for them right now, particularly in the United States where the playbook on how to scale a league collectively is becoming more commonplace.

• Chaser: Expect more data points and success stories. This trend is not stopping anytime soon.

“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 32 teams are more profitable than Manchester City, the highest revenue soccer club in the EPL.

   NFL Total Profit: $4.4 billion

   EPL: -$397 million

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. The story of Dallas Cowboys’ kicker Brandon Aubrey is amazing

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