Sports M&A activity in 2024: Deloitte’s outlook
Investing in sports has always been lucrative, and it continues to offer strong returns for investors. However, the landscape is evolving, and the potential for innovation is greater than ever before. In 2024, Deloitte predicts that the investor base exploring opportunities in sport will expand further, certain sport assets will attract record valuations, and women’s sport will continue to grow. Let’s take a closer look at the upcoming trends in sports M&A.
Investing in Disruption
In 2024, we anticipate investors exploring opportunities to ignite market disruption. With deep pockets and a long-term investment horizon, these investors may focus on expanding sports such as cycling, sailing, or padel, which are gaining popularity and participation. Through robust transformation strategies, these investments have the potential to challenge the status quo and introduce new, premium assets to the market.
Rising and Polarising Valuations
Demand for premium sports properties will rise, primarily driven by institutional investors. This will lead to an increase in valuations at the top end of the market. As a result, we expect several outcomes within the sports investment market:
- Surge in minority investments: Acquiring majority stakes in premium sports assets will require larger ticket sizes. This, coupled with a growing universe of passive institutional investors and incumbent owners seeking growth capital or risk reduction, creates an environment ripe for a surge in minority investments.
- Polarisation between premium and non-premium assets: Institutional investors’ demand for premium sports assets will drive up prices, creating a widening valuation gap between premium and non-premium assets with challenging growth prospects.
- Search for returns in adjacent market segments: As rising prices for premium assets reduce returns, institutional investors will seek opportunities in adjacent markets that benefit from the strong tailwinds generated by premium rights holders.
(Re)defining the Women’s Sport Investment Case
The women’s sports market experienced significant growth in 2023, and in 2024, a broader group of investors, including institutional investors, private equity, and high net worth individuals, will take notice. With an increase in capital and dedicated private equity funds focusing on women’s sports, rights holders and key stakeholders will redefine the investment case to attract the necessary growth capital.
Investment in sports is not only financially rewarding but also a gateway to innovation and societal impact. With the expected trends in 2024, investors have an exciting opportunity to be part of the sports revolution. Get ready to make bold moves and invest in the future of sports!
