How a football legend scored $125mn for the women’s game

Dust off your green jacket, the Masters is back! There’s an extra edge to the golf major this year, courtesy of LIV Golf, the Saudi-bankrolled rival to the US PGA Tour. Greg Norman, the LIV chief known as “the shark” in his playing days, wasn’t invited but has made it clear that his series’ players would celebrate together if one of them wins at Augusta this weekend.

That’s looking like a real possibility, with Brooks Koepka, a LIV rebel and former world number one, leading the charge into the weekend. A win would be a huge public relations victory for the breakaway tour, but it will take much more to challenge the PGA Tour’s supremacy.

This week, we dig into what’s behind Sixth Street’s $125mn investment in a new National Women’s Soccer League club, and explore the future of World Wrestling Entertainment and Ultimate Fighting Championship after Hollywood mogul Ari Emanuel’s $21bn deal to put them into the same ownership group – Samuel Agini, sports business reporter

The chance meeting behind Sixth Street’s $125mn bet on women’s soccer

Alan Waxman wasn’t a stranger to the world of sport. As chief executive of Sixth Street, the San Francisco-based investment firm, he’s taken stakes in the likes of Real Madrid, FC Barcelona, and the National Basketball Association’s San Antonio Spurs. Through its majority ownership of Legends, the concessions and hospitality company, Sixth Street has a view into the operations of many of sport and entertainment’s top stadiums and arenas.

But Waxman told Scoreboard that it wasn’t until his wife insisted he take a meeting with a retired footballer in the Bay Area that Waxman thought seriously about investing in women’s sport. That former footballer happened to be Aly Wagner, an American soccer legend who had long been campaigning to bring a pro women’s club to the California peninsula.

“The more we dug in the more we saw green light, green light, lots of green light in terms of indicators of the framework [of the investment]” Waxman said. The result of their meeting was a groundbreaking new agreement in women’s football which will see Sixth Street invest a $125mn into a new National Women’s Soccer League club, including a record $53mn expansion fee — the price paid to enlarge the collectively-owned league by adding a team — a 10-fold increase in expansion fees paid in 2020.

The team will be based in the Bay Area and is to be the first US pro-sports franchise majority owned by private capital, an almost unthinkable concept even four years ago when Major League Baseball broke the mould and became the first American sports league to even permit institutional investment for minority stakes.

Maddie Winslow, who ran the sale process for sports advisory firm Inner Circle Sports and the NWSL, said the negotiations reflected a maturation for a league which was only founded in 2012. “We asked [potential investors] to look at the business decision, the impact of the $53mn expansion fee. It’s not just, ‘the women deserve it’, but look at the numbers, look at the data”.

Inner Circle is also running the sale process for the Chicago Red Stars, a team whose previous ownership was forced out amid the 2021 systemic abuse scandal. Bids have reached the second round; Winslow said the Bay Area franchise’s expansion fee is “the benchmark from here”.

Is the league profitable? Jessica Berman, the NWSL commissioner, said “when you look at overall sports, I think the way people think about value creation is about enterprise value . . . the kinds of investors that we’re looking for are people who understand that this is a long-term value proposition.”

How WWE and UFC will pack a punch

Hollywood mogul Ari Emanuel and professional wrestling impresario Vince McMahon know what it takes to write a script. Their $21bn deal to combine Ultimate Fighting Championship and World Wrestling Entertainment will create a showbiz behemoth ready to capitalise on demand for live action.

At first glance, WWE and UFC are totally different. WWE superstars oil up, jump in a ring and play out a pre-determined fight, whereas UFC fighters really do beat the hell out of each other.

But both forms of entertainment thrive on a similar ethos. Emanuel and McMahon are showmen who know the value of content and how to monetise it.

When Emanuel’s Endeavor Group first bought into UFC in 2016, the mixed martial arts series had an enterprise value, including debt, of $4.1bn. Under the terms of this week’s deal, that figure soared to $12.1bn. WWE was valued at $9.3bn.

The combination will translate into greater scale. UFC made $1.1bn of revenue in 2022 and adjusted earnings of roughly $600mn. WWE’s revenues translated into adjusted earnings of about $400mn. UFC makes its money from just 40 annual events, whereas WWE hosts in excess of 200.

The combination will allow Endeavor to reach WWE’s estimated 1.2bn global fans, an audience that exceeds even UFC’s 700mn followers.

Live content remains king in the entertainment industry. WWE and UFC each makes more than 70 per cent of revenues from media rights, and Endeavor will hope to secure increases in upcoming renewal negotiations.

WWE and UFC can learn from each other’s strengths. Of UFC’s $1.1bn revenue last year, $143mn came from sponsorship, a tripling under Endeavor ownership. WWE’s sponsorship revenue totalled just $65mn. In the reverse, WWE made $130mn from consumer products such as toys; UFC’s equivalent was just $55mn.

Eric Bischoff, the wrestling promoter who supercharged World Championship Wrestling’s attack on WWE in the 1990s, tells Scoreboard that UFC-WWE can achieve more together.

“If you look at the business units within each of the respective companies, lightbulbs start going off in your head,” said Bischoff.

“Now you’re a $21bn behemoth you’re not two, smaller successful companies. That gives you leverage in the marketplace in any number of ways,” he added. “Licensing and merchandising being one of them, international television distribution being another, leverage when it comes to negotiating for venues.”

As well as upcoming media rights renewals, Endeavor has highlighted the opportunities to create more content, live events, sponsorship and licensing. It also highlighted the ability to go “direct to consumer”, with both UFC and WWE attracting loyal fans.

It’s not all rosy though. The FT’s Lex column is sceptical of revenue synergies. It also warned that — based on relative operating profit contributions, corrected for respective capital structures — WWE shareholders deserved just 43 per cent of the new company housing it and UFC, rather than the 49 per cent they’re receiving.

Perhaps that’s just the price of buying an elite sports entertainment asset controlled by 77-year-old McMahon. It’s also a rare opportunity to buy what is in effect a sports league that holds more control than the average sports property.

Sports leagues usually have to share their revenues with teams and their owners. WWE doesn’t have to bother with any of that. There aren’t any teams, just wrestlers and other staff.

These deals don’t come along very often.

Highlights

• With little over a year to go until the Paris 2024 Olympics, global sport is deeply divided on whether Russian and Belarusian athletes should be eligible to compete due to the ongoing war in Ukraine.

• Golfers who quit the European Tour to join LIV Golf committed “serious breaches”, according to a ruling by arbitration body Sporting Resolutions, and must now pay their £100,000 fines.

• Independent research found that “players had experienced some form of racism” in “every area” of the elite rugby. The research was commissioned by Rugby Football Union, Premiership Rugby and the Rugby Players Association.

Final whistle

Shelly-Ann Fraser-Pryce 🇯🇲 showed up and floored everyone in the parent’s race at her boy’s school.😂😂

She is surely having fun! pic.twitter.com/F3HSg5g4c7

— oluwadare (@Track_Gazette) March 31, 2023

Springtime heralds the season of school field days, usually a fun festival of games, sporting contests, and the joy of a day outdoors with friends and family. For Jamaica’s Shelly-Ann Fraser-Pryce, two-time Olympic 100m champion, her son Zyon’s school sports day figured to be just another one at the office. Fraser-Pryce obliterated the other parents in the women’s sprint race. In her own post on Instagram, she explained that not even her own coach wanted her to toe the line that day, but after her husband got dusted in the men’s race “it just didn’t make sense for us to leave without bringing home a single piece of gold”. Thoughts and prayers to the other mums at Zyon’s school.