BrazilM&A in sports industry picking up, says Oaklins
M&A experts in the sports market are set to have a good year in 2024. Despite facing global challenges last year, the sports market saw a record-breaking 285 deals – and that trend is expected to continue, according to analysis from Oaklins.
The sports M&A market has grown significantly in recent years, driven by trends in health, technology, and digitization. Much of this M&A activity is driven by major sports teams switching ownership or big investments in sports organizations.
For example, last year, British football club Liverpool FC received a major investment from Dynasty Equity Partners to the tune of $200 million, and Paris Saint Germain signed a deal with Arctos Partners and Qatar Sports Investments for a stake of the club worth over $4 billion.
The sports M&A market is dominated by strategic buyers, though private equity still accounted for 41% of deals over the past seven years. There were peaks in the number of deals in 2021, 2023, and now this year is shaping up to be a record year.
Within the last 12 months, private equity has accounted for around 37% of all acquisitions. A lot of that interest comes from trends that make the industry especially attractive, like the growing awareness of health and fitness benefits, strong fan engagement and brand loyalty.
In addition to that, digitization and other technological advancements have added to the sports industry’s appeal. Meanwhile, growing television audiences and the rise of e-sports have added to pent up demand.
These favorable characteristics have not gone unnoticed by investors, and they have been eager to get in the game.
Most of the deals in 2024 in sports so far have been domestic affairs, said Oaklins, with only 40% being cross border deals. The largest share of deals (36%) were related to sports teams, organizations, and centers, with deals relating to media, technology, products, and apparel lagging behind somewhat.
“Looking ahead to the remainder of 2024, substantial investments in the sports industry are expected to continue, driven by positive fundaments and emerging trends,” said Derk Verheul, Associate Director and sports specialist at Oaklins.
“As macroeconomic challenges ease and interest rates stabilize (and are anticipated to decrease), demand for premium sports assets will likely increase, leading to heightened competition and valuation levels.”
With the outlook, the sports arena is bucking a broader trend of M&A that tends to be in a decline, in comparison to the record-breaking years of 2021 and 2022. Earlier this year, Washington Post described sports as “one of the safest bets” for investors in the two years ahead.
