📊 The Pickleball Mania: Are there no other opportunities for sports focused investors?📊
🎾 🚀 Pickleball and padel are the new-age racquet sports taking the world by storm. Combining elements of tennis, squash, and table tennis, these sports have gained massive popularity seemingly overnight.
❗Full disclosure: As someone who played professional tennis, & worked in sport, I'm biased. I understand the real estate & infrastructure investment part. These are sports agnostic usually. What I don't understand is the competitive sport investment of Pickleball. Lets look at some metrics:
👉 Participation: ~50M people reportedly played Pickleball in the US in 2023
👉 Growth: CAGR projected ~14% YoY for the next 10 years
👉 Viewership: 2023 USA Pickleball National Championships had 2.6M viewers. For comparison, Wimbledon in 2024 had ~37M
👉 Investment: In infrastructure such as Picklr (Series B, valued at $59M), Major League Pickleball teams by celebrities, and even merchandise by 35 Capital, a PE firm
❓But what’s driving investor interest in the competitive side? Maybe the fact that there are limited opportunities for sports investments.
1️⃣ The sports sectors that currently exist: health & fitness, analytics, fantasy sports, enterprise solutions, and fan engagement are all saturated
2️⃣ Existing established sports: NFL, IPL, NBA: selective about investors, assets are at $B valuations, and there are limited seats at the table
3️⃣ Early Investor Opportunity: Pickleball could be like UFC in the early 2000s. UFC went from a $2M buyout in 2001 to a $4B valuation in 2016. Early investors in Pickleball are likely hoping for similar exponential returns
⚽ 🚀 Another sports opportunity is investment in Tier 3/4 leagues in established sports: Wrexham, currently in League 1 in the EPL is one example. It was bought in 2021 for $2.5M with the hope of taking it back to the Premier League (PL). But it is loss making; it lost $6M in 2023, and will likely lose $M more before achieving its goal
But leagues are very different from community sports. Viewership drives revenue:
🎾 🚀 Leagues and franchises are built on revenue from broadcasting, merchandise, and sponsorships, which are all linked to viewership. Without mass viewership, these revenue streams are limited. For the detailed numbers, I had written a piece on the Economics of Sports Leagues, you can check it out here: https://lnkd.in/gVJ-e7Jc
🎾🚀 And Pickleball, while is a great community sport, is unlikely to reach levels of viewership that sports that leagues are built around command. Established sports like badminton and volleyball already struggle to sustain leagues despite widespread participation.
To read the deep dive, click here: https://lnkd.in/gvSjG6gd