2023 was a challenging year across global M&A markets, suffering from the impact of high inflation and interest rate hikes amidst a challenging macroeconomic climate. With that said, the sports M&A market showed its resilience with another year of strong investment activity as investors sought out quality assets.

Looking ahead to 2024 and beyond, we expect to see significant levels of investment activity as macroeconomic challenges begin to ease and varying sources of capital continue to flow into the sector.

Sports M&A activity in 2023: An overview

Sports M&A activity in 2024: Deloitte’s outlook

Further investment has the potential to generate strong returns for investors and bring a new wave of innovation into sport.

In 2024 we expect that the investor base exploring opportunities in sport will continue to expand, certain sport assets will likely attract record valuations and women’s sport will continue on its growth trajectory.

In the coming year, we expect to see the following trends in sports M&A.

Investing in disruption

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.

In time and backed by robust transformation strategies, these deals may stand to mark the evolution of new, premium assets that may challenge the status quo.

Rising and polarising valuations

We expect demand for premium sports properties to increase, primarily driven by interest from institutional investors, which will continue to drive valuation increases at the top-end of the market.

This may impact the broader sports investment market in the following ways:

• Surge in minority investments: An increase in ticket sizes required to acquire majority stakes in premium sports assets; a growing universe of passive institutional investors; and a growing number of incumbent owners seeking to attract growth capital and/or de-risk their investments, has created an environment ripe for a surge in minority investments.
• Polarisation between premium and non-premium assets: As institutional investors continue to demand and drive-up prices for premium sports assets, the valuation gap between premium assets and non-premium assets with challenging growth prospects will grow.
• Search for returns in adjacent market segments: As rising prices for premium assets compress returns, institutional investors will seek returns in adjacent markets which stand to benefit from the strong tailwinds generated by premium rights holders.

(Re)defining the women’s sport investment case

2023 saw continued growth in the women’s sports market and in 2024 we expect to see an expanding group of investors—including institutional investors, private equity and high net worth individuals—begin to take note.

With deeper pools of capital forming and investing in the segment, including private equity funds with an exclusive mandate to invest in women’s sport, we expect rights holders and their key stakeholders to redefine the women’s sport investment case to attract required growth capital.

Concluding thoughts

As more capital flows into the sports sector from both new and existing investors in 2024, it will be crucial for investors to understand the stakeholder dynamics that may potentially impact their investment thesis through thorough, sector-specific diligence.

Investing in sports assets that carry significant community, social, economic and commercial value can oftentimes come with complexities not apparent in other sectors. Sound, sector-specific advice throughout the investment cycle is critical to maximising value of investment decisions.