Growing up for me, sport held the romantic notion of participation, support, competition. Who didn’t want to be a professional footballer, cricketer or whatever sport you enjoyed most? I grew up in Newcastle and have, unashamedly, got black and white blood. Sport was entertainment. It was a source of excitement and community bonding. Scoring at St. James Park still sits top of my dream list, even at my advancing years.
Athletes see it as none of the above. For most it’s a profession, earning through contracts, sponsorships, and endorsements. The first time I realised this was when I was with a retired Australian cricketer. He was in Dubai having invested in real estate. When I asked him if he wanted to play in game at the weekend I was taken aback by his response. He had not even touched a cricket ball in the years since retirement. He asked what I did and then asked if I’d be doing that for fun in my retirement. It was a real eye opener.
Today, sport has transformed into a lucrative industry, fueled by massive investments and a globalized market. I’m still holding on to that romantic notion but it’s getting harder and harder as the dollar return takes further hold.
According to PwC, the global sports market was valued at around US$614 billion in 2023, growing at around 8% annually.
Major events like the last World Cup in Qatar in 2022 generated US$7 billion. The Olympics in Tokyo had an estimated economic impact of approximately US$28-30 billion for Japan and that was impacted by COVID-19 so was somewhat muted compared to previous Games. The valuation of sports teams continues to rise, with NFL franchises averaging over US$3.1 billion and European clubs like Manchester United valued at US$4.6 billion.
Private investors are increasingly involved. CVC Capital Partners bought a 28% stake in Formula 1 for US$1.1 billion, and the esports industry attracted over US$1.2 billion in investments globally in 2023. As governments invest in stadiums, sports infrastructure, and the privatization of teams at home, sovereign wealth funds now account for 24% of all global sports investments, largely abroad.
The Middle East, driven by Saudi Arabia and Qatar, has rapidly become a key player in global sports. The Saudi Arabia invested US$1.5 billion in LIV Golf and acquired a 61% stake in Newcastle United for around US$400 million. It has also hosted the Saudi Arabian Grand Prix, attracting over 400 million viewers worldwide, and will be hosting the Asian Winter Games in 2029 and FIFA World Cup in 2034. There is talk of an Olympic bid.
As well as hosting the 2022 World Cup, Qatar invests in sports through Qatar Sports Investments (QSI), a state-owned enterprise that owns Paris Saint-Germain which it acquired for about $76 million in 2011. It is valued at over $3 billion. QSI also holds a stake in Monumental Sports & Entertainment which owns US ice hockey and basketball teams.
While the sports industry is not in the top ten largest global industries by size at US$614 billion, it is a highly profitable, influential, and rapidly expanding sector. Its cultural impact and revenue potential make it a vital part of the global economy, especially given its increasing integration with media, technology, and international investments. Saudi Arabia’s sports investments, for example, are part a key part of Vision 2030 and the diversification of the economy aimed at boosting tourism and elevating its international profile through sports diplomacy.
From a pastime to a multi-trillion-dollar industry, sport continues to change and grow as a global investment opportunity. With expanding markets, increasing valuations, and strategic regional investments, particularly in this region, the sector offers compelling prospects for both existing and new investors. It is something I am going to have to get used to. The days of kickabouts in the park with jumpers for goalposts still happen but most of those kids are wearing replica kits and are now firmly part of the business side of sport. They just don’t know it yet.
Paul Venn
Managing Director
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