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

• 📰 This Week’s Topic: Meet SailGP, one of the hottest, and unlikeliest, global sports properties in 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”: Hard launching into the revenue sharing era of college sports, and F1’s big opening weekend

• 💪 Weekly Reminders that Sports are Awesome: A classy move by the Islanders, and a bunch of Ryans go to Coors.

Hey team,

Let’s start off with a thought exercise this week.

If I told you there is a nascent sports league out there doing $100 million in revenue that is run by a tech mogul that counts some of the biggest sports-minded institutional capital and A-list celebrities/athletes as investors, is considered to have the best TV production in all of sports, and has seen its team valuations 9x in the last five years, what image comes to mind?

Just a shot in the dark here, but I am going to guess many of you (myself included until I dug into it further) would not have guessed SailGP.

The seven-year old league is in the middle of its fourth racing season, and it is catching all of the tailwinds (oh yes, lots of boat puns this week) as it seeks to become the Formula 1 of the sea and provide its athletes with a viable league in a sport traditionally reserved for the Olympics and yacht clubs.

In this week’s SBP, we’re heading out onto the water to talk SailGP. You’ll learn:

• The origins of the league and how

• What differentiates it

• Why investors like it

What is SailGP

As we have discussed in prior issues, there are myriad sports that appear on our TV screens and capture our attention once every few years during the Olympics or a trademark event, only to then disappear out of the cultural narrative until the next major global occurrence comes along.

And as with a few of those of other sports, we are seeing well-capitalized leagues spring up that want to make them mainstays on the sporting calendar and providing the athletes with the ability to make a living competing year-round.

In this case, it’s billionaire Oracle founder Larry Ellison and sailing legend Sir Russell Coutts that have taken the helm (plenty more coming), founding Sail GP in 2018 to turn sailing into a commercially viable sport.

Here’s how it works.

The league features 12 teams representing countries from around the world — Australia, Brazil, Canada, Denmark, Germany, Great Britain, France, Italy, New Zealand, Spain, Switzerland, and the United States — that compete on a global circuit in iconic coastal cities such as New York, Saint-Tropez, and Sydney for a $12.8 million total prize pool.

Each SailGP event is structured for maximum fan engagement and rapid-fire action:

• Fleet Races: Every event includes six short races over two days. Teams earn points based on their finishing position.

• Match Race Final: The top three teams from the fleet races advance to a winner-takes-all final.

• Season Scoring: Points carry over from each event, and the top three teams at season’s end qualify for the Grand Final, where they race for the SailGP Trophy and an additional $2 million prize.

While it draws comparisons to F1 for a number of valid reasons, the racing is more like NASCAR, where the vehicles are all the same (in this case, an F50 foiling catamaran) and the outcomes are mainly determined by skill, teamwork, and tactics — not just the size of a team’s wallet or its technology edge.

The result? A level playing field that has led to an unpredictable, ultra-competitive league, as only Spain has won more than one event this season.

This unique approach also extends to the business side.

The league is truly a global sport, as its races are broadcasted to 200+ million households in 200+ countries around the world. But, one of the big challenges with televising sailing is how far away the action is and how many nuanced actions are going on at any given second. So, it is hard to understand what is happening and who is doing what during a race.

Fortunately for SailGP, its skipper (sorry, had to!) just happens to be the founder of one of the biggest tech firms in the world.

Oracle has wired up each catamaran with 125 sensors, which collect over 50 billion data points per race via a private 5G mesh network. That real-time data powers “LiveLine,” an augmented reality overlay system that appears during broadcasts, helping fans visualize race positions, speeds, strategies, and more (check out the behind the scenes video here).

This technology investment has created one of the best viewer experiences in sports, and the league averages around 20 million global viewers per race (about one-third of an F1 race and on par with an important NFL game).

Speaking of the NFL, SailGP has taken an innovative strategy in the U.S., following NFL games on CBS on Sundays to piggyback off the high viewership to drive interest. One successful example where this strategy worked: two seasons ago, a race in Spain after the NFL window had 1.78 million viewers, the largest audience for a sailing event in over 30 years.

Why Investors Like It

Just a few years ago, team valuations hovered between $5 million and $10 million. Today, they’re skyrocketing and attracting a combination of savvy investors and A-listers:

• Australia: Gained a recent investment from actors Ryan Reynolds and Hugh Jackman

• France: Ares Management and global soccer superstar Kylian Mbappé recently joined the team’s ownership

• Italy: Acquired by Muse Capital and a group of investors — including actress Anne Hathaway — for $45 million

• Switzerland: Backed by tennis icon Roger Federer

• USA: Purchased by billionaire Marc Lasry for $35 million a few years ago, with a high-profile ownership group that includes Gary Vaynerchuk, Issa Rae, DeAndre Hopkins, and Deontay Wilder. The team is now raising additional capital at a $125 million valuation

This wave of celebrity and institutional investment has infused the league with capital and cultural cachet, which hopefully creates the flywheel (propeller?) for further interest and revenue.

Here’s what makes SailGP a standout investment opportunity:

Global footprint with a known format

The touring model creates opportunities for each race to be a must-see/attend event at each location, and the global scale and spectacle creates a party-like atmosphere in the most beautiful locations around the world that caters to a more well-to-do audience.

Ben Johnson, SailGP’s CRO, notes that the fledgling league has drawn inspiration from well-established sporting events that double as entertainment hubs like the Kentucky Derby, Indy 500, and F1 (makes sense), and they even named DJ Khaled its Chief Hype Officer to drive further attention (doesn’t make sense, but hey, at least they’re making a splash — sorry, again).

This breakdown has attracted notable partners, as SailGP’s partners span sovereign wealth funds (Mubadala Capital in Abu Dhabi), luxury brands (Rolex is the title sponsor), several banks (JP Morgan, Deutsche Bank).

SailGP is projecting $100-$150 million in revenue this season, up 10x from the $10 million it generated in its debut season six years ago.

Young, digitally engage audience

Despite the connotations of sailing catering to the older generations and who is attending the races in person, SailGP is actually making in-roads in the young demographics via its online presence:

• 1.4 billion video views across social channels over the past year

• YouTube subscriber base has tripled

• Nearly 49% of subscribers are between 18–34

Capturing this younger audience helps jumpstart commercial conversations with consumer brands, sponsors, and streaming platforms alike.

Large potential upside at a palatable price

If you’re an SBP ball-knower, you know I’ve been beating the drum about this for awhile: sports is a hot investment item, but the traditional leagues’ valuations are getting so rich that only a select few can get a piece.

The get-in price on Sail GP is comparatively much more reasonable, and the rapid jump from seven figure to eight and nine figure valuations in a short period of time shows there is a great market opportunity.

What’s Next

As described above, things are going pretty well right now. SailGP’s executives have disclosed that they are ahead of their internal financial targets and are on track to have all of the teams reach profitability next year (four of the 12 currently are).

The plan is to lean into this momentum, and keep going and pushing the envelope. In addition to growth in traditional areas — TV, attendance, and sponsorship — the league has a goal to expand rapidly in both scale and ancillary revenue streams in the next few years. Coutts has been on record saying they’re launching two more teams in the near future (at a minimum of $50 million expansion fee), and he’d like to see SailGP double its events to 20+ a year, with the Gulf States being prime targets given their interest in global sports and pre-existing investments in SailGP.

This is beneficial upfront, as SailGP is now fetching six figures for its typical hosting fee, with Auckland paying over $1 million to host a Grand Prix this past January. But in addition to the incremental revenue gains from the races in the new regions, every time one of these new races comes online, it likely draws more local fans into the fold who will follow the sport and the rest of the season.

The other big initiative is unlocking the betting market. Beginning last month, fans could bet on races through DraftKings in the U.S. and Bet365 internationally. The league is banking on its fast-paced, quick hitting action to capture bettors’ attention and also attract more casual fans, similar to what F1, UFC, and other global leagues have done.

There is always the potential for storm clouds and choppy waters on the horizon (last one, I promise), but SailGP’s heading (okay, that was the last one) looks to be pointed up and to the right as of now.

🍸️ 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: SailGP is one of the hottest sports properties out there right now. It counts some of the biggest sports-minded institutional capital and A-list celebrities/athletes as investors, it is considered to have the best TV production in all of sports, and it has seen its team valuations 9x in the last five years. It’s also one of the latest examples of a league taking a traditionally Olympics-only sport and turning it into a viable year-round product

• Shot: The league features 12 teams representing countries from around the world — Australia, Brazil, Canada, Denmark, Germany, Great Britain, France, Italy, New Zealand, Spain, Switzerland, and the United States — that compete on a global circuit in iconic coastal cities such as New York, Saint-Tropez, and Sydney for a $12.8 million total prize pool. Each SailGP event is structured for maximum fan engagement and rapid-fire action (the boats go 60+ MPH), and because all of the boats are the same, there is a level playing field that has led to an unpredictable, ultra-competitive league (only Spain has won more than one event this season).

• Shot: This unique approach also extends to the business side. SailGP is projecting $100-$150 million in revenue this season, up 10x from the $10 million it generated in its debut season six years ago. The league is truly a global sport, as its races are broadcasted to 200+ million households in 200+ countries around the world, and Oracle (SailGP is co-founded by Oracle founder Larry Ellison) has wired up each catamaran with 125 sensors, which collect over 50 billion data points per race via a private 5G mesh network. That real-time data powers “LiveLine,” an augmented reality overlay system that appears during broadcasts, helping fans visualize race positions, speeds, strategies, and more (check out the behind the scenes video here).

• Shot: Team valuations have jumped from $5 million just a few years ago to over $50 million, and the league now counts A-list celebrities like Anne Hathaway, Kylian Mbappe, Ryan Reynolds and Hugh Jackman as investors in its teams, and it has also attracted institutional investors like Ares Management and Marc Lasry’s Avenue Capital. Here’s why they like it:

  • Global footprint with a known format: The touring model creates opportunities for each race to be a must-see/attend event at each location, and the global scale and spectacle creates a party-like atmosphere in the most beautiful locations around the world that caters to a more well-to-do audience. This breakdown has attracted notable sponsors, SailGP’s partners span sovereign wealth funds (Mubadala Capital in Abu Dhabi), luxury brands (Rolex is the title sponsor), several banks (JP Morgan, Deutsche Bank).

  • Young, digitally engage audience: Despite the connotations of sailing catering to the older generations and who is attending the races in person, SailGP is actually making in-roads in the young demographics via its online presence: 1.4 billion video views across social channels over the past year, the YouTube subscriber base has tripled, and nearly 50% of subscribers are between 18–34. Capturing this younger audience helps jumpstart commercial conversations with consumer brands, sponsors, and streaming platforms alike.

  • Large potential upside at a palatable price: If you’re an SBP ball-knower, you know I’ve been beating the drum about this for awhile: sports is a hot investment item, but the traditional leagues’ valuations are getting so rich that only a select few can get a piece. The get-in price on Sail GP is comparatively much more reasonable, and the rapid jump from seven figure to eight and nine figure valuations in a short period of time shows there is a great market opportunity.

• Chaser: As for what’s next, in addition to growth in traditional areas — TV, attendance, and sponsorship — the league has a goal to expand rapidly in both scale and ancillary revenue streams in the next few years. SailGP is launching two more teams in the near future (at a minimum of $50 million expansion fee), and it is expecting SailGP to double its events to 20+ a year, with the Gulf States being prime targets given their interest in global sports and pre-existing investments in SailGP. The other big initiative is unlocking the betting market. Beginning last month, fans could bet on races through DraftKings in the U.S. and Bet365 internationally. The league is banking on its fast-paced, quick hitting action to capture bettors’ attention and also attract more casual fans, similar to what F1, UFC, and other global leagues have done.

🤯 “Whoa” of the Week

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

1. The gamesmanship and front-loading started well before the new revenue sharing era started

2. F1 had a massive opening weekend, and it will be interesting to see the long-tail on what it does for the sport

   (I saw it this weekend — essentially Top Gun on wheels and hits every classic sports trope, but let me tell you: it absolutely rocks)

💪 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 Islanders with a nice touch in honor of #1 overall pick Matthew Schaefer’s mom, who passed away from cancer last year

2. When you’re the Rockies and are on pace to potentially be the worst team ever, you do whatever you can to drive interest and attendance, including a “Ryan” game

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