Amidst economic uncertainty, investors are beginning to look at alternative forms of investment that can offer a sense of stability and predictability. Sports investments, which have become more accessible to investors, have emerged as powerful tools for enhancing brand visibility.
Previously, given the high value of top-performing sports teams, they were too expensive for a vast majority of investors. In addition, these highly prized assets are rarely up for sale. However, lately, emerging sports leagues have created a new opportunity allowing investors, like you and me, to own a piece of a professional sports team or league.
Let’s look at some of the promising opportunities that lie in investing in sports!
Increasing Profitability of Sports
One of the primary advantages of sports investments is the rapidly increasing revenue and value of the sports industry. The expansion of broadcasting rights and the establishment of major sports leagues have led to the increasing commercialization of sports, making it a profitable opportunity for investors.
As the new sports leagues continue to emerge and the sports economy continues to rise, the sports industry is expected to reach a value of $600 billion by 2025 and $826 billion by 2030. Many other factors, such as the future of esports and sports technology, the rise of fantasy sports, and legalized sports betting, have all contributed to the unparalleled growth of the sports industry.
Diversification of Your Investment Profile
Another major benefit to sports investments is its position as an alternative asset class. Alternative asset classes, such as sports investments, have been gaining popularity as a new investment opportunity that is separate from the traditional and more volatile markets.
Especially after the economic downturn as a result of the global pandemic, and in the face of a possible emerging financial crisis, investors are starting to turn to alternative asset classes in a bid to diversify their portfolios. This is where sports investments come into the picture, as an asset class that continues to remain in great shape and can be a hedge against economic uncertainties.
Despite a drop in consumer spending during economic downturns, sports assets have continued to grow and generate revenue. In fact, looking back at historical data, the sports market size has only seen year-on-year growth in the past 15 years, even during the recession from 2007 to 2009 and the recent pandemic.
As such, sports investments are a great opportunity for investors as an alternative asset class that can diversify their investment portfolio and make it less susceptible to market volatility.
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The Untapped Potential of Investing in Rugby
The benefits of a sports partnership are clear and can be a key aspect of a brand’s marketing strategy. The question is, what team or sport should your brand invest in? This is where investing in the sport of rugby can present a unique and often untapped opportunity.
Rugby has been rapidly gaining popularity across the United States and with rugby clubs and leagues welcoming private equity investments with open arms, investing in the sport could be a strategic move for businesses.
Global Growth
Rugby has experienced significant growth in the United States, with over 110,000 registered players and 1.5 million people playing casually each year, and it is continuing to grow. The inclusion of rugby sevens in the Olympics has also contributed to its continued growth and global appeal.
As the US prepares to host the Rugby World Cup for the first time in 2031, the sport is bound to gain more fans and experience even more growth in the upcoming years. This makes now a great time to start investing in rugby to tap into the sport’s growing popularity and revenue.
Rugby's Increasing Commercial Value
As rugby continues to grow in popularity, its commercial value is also on the rise. Major rugby tournaments, such as the Rugby World Cup and other smaller leagues and clubs can attract substantial viewership and sponsorship opportunities. With sports sponsorships, having this viewership and visibility is what brings sales and revenues.
Currently, rugby is one of the most popular sports but has a disproportionately small share of the ad market. The industry may seem underutilized now, but this just means that there is so much potential for rugby to truly grow and prosper! Getting a jumpstart and investing in rugby now also means businesses are in pole position and can capitalize on the sport's increasing commercial viability in the future.
At the end of the day, the benefits of sports investing and partnerships are diverse and far-reaching. Businesses receive greater visibility and engagement with sports fans, while investors own a recession-resistant growth asset. As rugby gains momentum on the global stage, investing in the rapidly growing sport also presents a strategic move for businesses looking to tap into new markets and leverage the sport's continued growth.
Here at the National Rugby Football League, we’re looking to build the leading entertainment and media company in the sport globally. To learn more, reach out on NRFL’s social media channels or our website!