Follow the Money: Brands Should Track Investors When Considering Partnerships

Deloitte’s Sports Business Group has just published its 2024 Sports Investment Outlook, which offers an overview of global activity in 2023 as well as the company’s thoughts on the direction of mergers and acquisitions activity this year.

The report’s findings offer insights beyond the investment community. In particular, it contains information of interest to marketers who are trying to determine the best places to put their sports sponsorship and partnership dollars.

Brands have no lack of properties to choose from in that area. Even after culling opportunities that don’t meet geographic, demographic and other critical selection criteria, sports marketers are still faced with tough decisions about which among many viable partnership opportunities is likely to deliver the best results.

Increasingly, sponsors seek rights holder partners that are making necessary investments to improve all aspects of the organization from on-field performance to fan experience to operational excellence.

The money to spend in those areas often comes from injections of capital from new investors seeking to “step in and develop and execute new commercial growth strategies,” according to Deloitte, as well as “bring a new wave of innovation into sport”—aligning them with the needs and expectations of sponsors. Thus the advice to brands to follow the M&A dollars.

The report’s most relevant data for sports marketers includes:

• “Football (soccer) continued to make up the lion’s share of deal flow in 2023 comprising 52 percent of all deals…partly due to the sheer number of investable assets compared to other sports. English clubs were the primary target—making up 29 percent of all football deals…Almost one in five (18 percent) of all football deals last year were struck with North American clubs, more than in other ‘big five’ European football markets. North American investors led several investments into domestic properties across the MLS and NWSL.”

• “Basketball saw the second largest share of deals (eight percent) in 2023, with several high-profile transactions executed in NBA franchises. Several minority investments closed during the year alongside three high-profile majority investments (Phoenix Suns, Charlotte Hornets and Dallas Mavericks).”

• “2023 saw a rise in minority investment activity, with these deals making up 45 percent of all transactions. Minority investment activity was predominantly driven by strong activity in premium North American assets, where franchises and business models are traditionally more stable, relative to other sports assets where sporting performance is critical to executing a successful investment case…Almost 60 percent of all transactions in the ‘big four’ North American sports (American football basketball, baseball and ice hockey) were minority transactions in 2023…We saw two landmark deals announced in 2023, which saw a sovereign wealth fund and a pension plan invest directly into North American sports franchises for the first time—OMERS’ minority investment in Maple Leaf Sports & Entertainment…and Qatar Investment Authority’s minority investment in Monumental Sports & Entertainment.”

• “2023 was a watershed year for women’s sport with several investors of differing profiles striking deals in women’s sport. Of all transactions in 2023, 14 percent were women’s sport only deals, with an additional 34 percent of deals into mixed properties that involved both a men’s and women’s rights holder… Women’s sport will continue on its growth trajectory (in 2024).”

• “In 2024 we expect to see investors explore opportunities to ignite market disruption. Investors with deep pockets and a long-term investment horizon may look to deploy capital across expanding sports such as cycling, sailing or padel, which are rising in popularity and participation.”