Sixth Street Partners has become the first institutional investor to put its money into a professional US sports franchise after announcing its intention to commit $125 million towards the acquisition of a new National Women’s Soccer League (NWSL) team. This investment includes the league’s record-high $53 million expansion fee, which is ten times greater than the one paid just last year.
Until 2019, US sports leagues disallowed private capital investments into their league but with Major League Baseball making changes to its ownership bylaws, it spawned a domino effect as other organizations followed suit. This has lead to increased team valuations, more attractive broadcast rights agreements, and the presence of the coronavirus pandemic.
NWSL Commissioner Jessica Berman stated their pride in pioneering new ideas for domestic leagues in the US, tackling various difficult issues, and said that the league expects sophisticated investors to be attracted to the value proposition of the franchise.
Chief Executive Officer of Sixth Street, Alan Waxman, has affirmed the long-term intent of the team stating that it will have a minimum 10-years ownership of the new franchise. As the NWSL has only been running since 2012, Waxman believes it will take about 10 years for the league to reach equality with its men’s counterpart, Major League Soccer.
Aside from Sixth Street Partners, other notable minority investors include Sheryl Sandberg, Rick Welts, and four former US women’s national team members: Brandi Chastain, Leslie Osborne, Danielle Slaton, and Aly Wagner. All of them were influential in the attempt to bring the team to the San Francisco Bay Area where the franchise will be based.
The new franchise, which still lacks a name, is unofficially set to kick off in the 2024 season. For the league, this could be a crucial moment as it is currently undergoing a major reckoning sparked by the systemic abuse scandal that saw the departure of former Commissioner Lisa Baird and the sale of two of its teams – Chicago Red Stars and the Portland Thorns.
Sixth Street Partners is no stranger to the world of investing in sports. The firm has close ties with Real Madrid and FC Barcelona, and also are major investors in the San Antonio Spurs’ Major League Basketball team.
It looks as if the NWSL is stepping into a new era, filled with potential growth, as private capital and sophisticated investors provide the necessary support for the league’s growth and development. With the San Francisco Bay Area new team set to hit the field in 2024, women’s sports are looking at a bright future ahead.
