[SINGAPORE] What do Singapore’s remisier king Peter Lim, Malaysia’s Berjaya Corp founder Vincent Tan and Thailand’s former prime minister Thaksin Shinawatra have in common? They are part of an elite circle of ultra-rich who own or have owned top-flight football clubs.
More are expected to join their ranks. Industry watchers said interest in sports investing is growing, as major sports leagues and teams seek alternative capital financing options.
Standard Chartered (Stanchart) on Apr 14 introduced a new alternative fund focused on sports for ultra-high-net-worth and high-net-worth clients of its Global Private Bank.
Stanchart noted that the media industry has grown 16 to 17 per cent in media contract value in the last 10 years, with major sports leagues around the world signing record-breaking broadcasting deals. And the steady revenue generating model in sports has been gaining the interest of private investors.
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Recent high-profile sports-related transactions among leading family offices have also highlighted sports investing as an alternative asset class for those looking to strengthen and diversify their portfolios.
The Business Times understands that DBS Private Bank launched a sports, media and entertainment fund for wealth clients on Apr 10.
Industry watchers said football clubs are no longer viewed solely as prestige assets – they are now part of complex investment strategies aimed at capturing value through media rights, sponsorships, global fan monetisation, and capital appreciation.
The investment boom
A DBS study noted that the global sports industry – currently valued at US$463 billion – is expected to expand at a compound annual growth rate (CAGR) of 7 per cent to reach some US$862 billion by 2033. Football makes up a small slice of this pie. But in the US – one of the largest sports markets – it has been growing quickly.
Major League Soccer – America’s football league – grew at a CAGR of 17.1 per cent between 2018 and 2022. This outpaced growth of its National Football League (15.3 per cent), National Basketball Association (12.6 per cent), National Hockey League (9.1 per cent), and Major League Baseball (8.6 per cent).
Meanwhile, a Deloitte report revealed that football led all other sports in terms of investment by deal volume, accounting for half of total transactions. Industry analysts attributed the increased investor interest to rising club valuations and expanding global audiences.
Mergers and acquisitions (M&As) – which involve transferring ownership of a club to another party, often resulting in substantial changes in a team’s strategy, financial structure and operational model – continue to lead the sports industry in terms of activity this year, said James Walton, Deloitte’s sports business group leader for Asia-Pacific and South-east Asia.
The momentum follows a record-breaking 2024, during which M&A deals increased 44 per cent – largely fuelled by private equity inflows, enhanced fan engagement and the emergence of sports technology, Walton added.
High-profile transactions such as the US$3.3 billion World Wrestling Entertainment-Ultimate Fighting Championship merger, and the significant stake sales in The Hundred cricket league franchises exemplify this trend.
Stadium financing is another key growth area, with significant capital deployed across North America, Europe and the Asia-Pacific. Notable deals include Everton’s £350 million (S$610 million) stadium financing deal, Walton noted.
The inflexion point of the financial landscape reached in 2024 signals a “new era” for sustainable growth, said Albert Yang, JPMorgan Private Bank’s Asia head of alternative investments.
He noted that private equity funds and institutional investors play a significant role in the financial landscape of sports, which is poised for sustainable growth.
Investor appetite is being fuelled by structural tailwinds: football’s resilience in economic downturns; rising media and sponsorship revenues; limited supply of elite assets; and a growing population of ultra-high-net-worth individuals; said Ivo Voynov, Citi Private Bank’s global head of sports financing.
Real estate linked to clubs – such as stadiums and surrounding infrastructure – is also becoming a valuable lever for returns.
“There is a belief that with sophisticated institutional investment, the sector will ultimately become more disciplined in its approach to player transfers and salaries, which, as the revenues continue to grow, will result in more teams being profitable,” Voynov said.
Market drivers
Voynov noted that valuations of football teams have increased significantly over the past decade, with investors drawn to the massive global audience of the game.
Deloitte attributed this surge to a number of core financial fundamentals – which include the rising value of media rights; growth in commercial partnerships; brand strength; team performance; and the size and loyalty of the fan base.
The sector’s upside potential is further bolstered by the expansion of the global sports market – especially with the evolution of digital platforms and streaming services. These platforms have significantly broadened teams’ international exposure and created more opportunities for revenue generation, Walton said.
Private equity interest has further amplified valuations, with many firms seeing sports assets as a hedge against traditional market cycles.
“One appealing aspect of investing in sports for private equity is the potential for uncorrelated returns. Unlike traditional investments that are heavily dependent on market performance, sports investments offer diversification into a new asset class and may shield investors from market volatility,” he said.
DBS’ chief investment office noted that sports investments, once seen as trophy assets, are increasingly regarded as legitimate opportunities for long-term financial gain. This is in part due to the highly limited supply of franchises, especially in the US, where only 153 teams exist across the five major leagues due to stringent expansion criteria.
“This scarcity factor enhances the desirability of franchises, making them coveted assets and driving up their value,” DBS said.
Deloitte’s Walton added that a surge in football investments in 2021 and 2022 was largely due to the financial impact of the pandemic, including historically low interest rates and distressed clubs being put up for sale.
However, the landscape has changed. With fewer attractively priced clubs available and many investors focused on building value within their existing portfolios, opportunities are becoming more limited. Owners’ exit prices have also become increasingly unrealistic, making acquisitions more challenging, Walton said.
This has prompted a growing interest in minority stake deals, Walton said. As top-tier valuations rise, many investors are choosing to acquire smaller equity positions as an entry point into the market.
Examples include minority investments in prominent clubs such as Manchester United and Paris Saint-Germain.
Another area gaining inflow traction is women’s football, which is seen as having “significant growth potential”, Walton noted.
Pointing to other trends, Walton noted that there has been an increase in investment interest especially from private and sovereign-wealth investors, which has brought about substantial growth in valuations of major sports properties.
Major League Soccer has seen a 1,565 per cent increase in valuation over the last decade, which has significantly “outpaced” the S&P 500, the sports analyst added.
“Sports offer investors a way to diversify and build more resilient portfolios with long-term capital gain potential while offering stable returns from recurring revenue streams,” Walton said. “Many investors in this class also recognise the intangible value from owning a high-profile sports property.”
Deloitte anticipates that the market could see a first wave of private equity exits this year.
“This marks a critical juncture in the evolving sports investment landscape,” Walton said, warning that investors will have to evaluate the returns achieved by early market participants and consider their own investment thesis and exit strategies. “This could potentially shape future ownership structures and influence how new capital is deployed in the sector.”
