Investment in sports continued\nduring the shutdown. This month we will\ntake a look at the rationale and outlook going forward.<\/p>\n\n\n\n
Every industry was deeply\neffected by the pandemic, but sports and entertainment were among the hardest\nhit. Seasons and events were canceled,\npostponed or rescheduled.<\/p>\n\n\n\n
As in any downturn, there will\nbe an adjustment that occurs until the recovery takes hold. Many are under financial duress, causing\nsellers to enter the marketplace at discounted prices. <\/p>\n\n\n\n
The underlying business\nfundamentals of well capitalized leagues remains sound, supported by long term\nbroadcast deals and sponsorship contracts. \nThere are some teams and related businesses that are suffering from cash\nflow issues where revenue is dependent on the consumer spend.<\/p>\n\n\n\n
Opportunities arise for those\nwith capital and ones needing liquidity. <\/p>\n\n\n\n
There has been a change in\nmind-set in attending large events. \nAttendance at sports has been in decline. There are empty seats at races and tracks\nhave reduced overcapacity by removing seats.<\/p>\n\n\n\n
Promoters have worked with\nhealth officials to develop plans. Along\nwith restrictions on crowd size, attendance will grow but not to the levels it\nonce was.<\/p>\n\n\n\n
Creating value for fans with flexible\nticket and concession packages will help the bottom line.<\/p>\n\n\n\n
The pent-up demand for live\nsports was front and center at the start of the shutdown. Sports are fortunate that they have an\nengaged community with strong loyalty and brand awareness. <\/p>\n\n\n\n
The intellectual property of\nsports is content. Transferring this to\nconsumer interaction on a digital is key. \nMotorsports did this with iRacing and other simulation platforms. In-race data, realistic track and car\ngraphics and professional drivers kept enthusiasm high and dollars flowing.<\/p>\n\n\n\n
Sports is a scarce\ncommodity. There are a limited amount of\nleagues and teams available. <\/p>\n\n\n\n
The pool of potential owners\nand buyers is driven by wealthy individuals looking to be part of the\nindustry. They are usually successful in\nother businesses and have capital to invest. \nThis has continued to be the underlying premise of increased valuation\nlevels.<\/p>\n\n\n\n
The sports infrastructure is\nwell developed. State of the art\nstadiums, established team operations, solid sponsors and loyal fan base, along\nwith fantasy leagues and betting point the way to a bright future.<\/p>\n\n\n\n
Complete ownership is beyond\nthe reach of most new investors. League\nrequirements along with legal issues complicate the equation. Minority positions are typical and manageable\nfrom an investment standpoint.<\/p>\n\n\n\n
Motorsports investment is\nfollowing these trends. The charter\nsystem in NASCAR and concorde agreement in Formula One have brought in new\ngroups.<\/p>\n\n\n\n
23XI Racing backed by Michael\nJordan and Denny Hamlin is one example. \nJordan\u2019s ownership of the Charlotte Hornets and Hamlin\u2019s career at Joe\nGibbs Racing is a formidable combination. Along with the shared commitment of founding\npartners and Bubba Wallace in the driver\u2019s seat, they will be in the limelight.<\/p>\n\n\n\n
McLaren Racing received an\ninvestment led by MSP Sports Capital. The deal for a total amount of $245\nmillion over two years for up to 33% ownership stake values the team at $740\nmillion. Led by Jeff Moorad, he was part\nof the ownership group of Hall of Fame Racing around 2006.<\/p>\n\n\n\n
The long term future of\ninvesting in sports is secure. The\neconomic fundamentals and deep pool of investors supports this positive\ntrend. Fans will be able to enjoy the\ngreen flag for years to come.<\/p>\n","protected":false},"excerpt":{"rendered":"
Investment in sports continued during the shutdown. This month we will take a look at the rationale and outlook going forward. Every industry was deeply effected by the pandemic, but sports and entertainment were among the hardest hit. Seasons and events were canceled, postponed or rescheduled. As in any downturn, there will be an adjustment […]<\/p>\n","protected":false},"author":5,"featured_media":831,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/830"}],"collection":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=830"}],"version-history":[{"count":2,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/830\/revisions"}],"predecessor-version":[{"id":842,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/830\/revisions\/842"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/media\/831"}],"wp:attachment":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=830"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}