SailGP, rugby and PJL: Inside the new £50m budget sporting asset class
With big money tickets ever harder to find, investors are looking far and wide for their next affordable investment.
Big-money takeovers will always catch the eye; whether that be the multi-billion-pound purchase of Chelsea by a Todd Boehly-fronted consortium from Roman Abramovich, the £1.3bn takeover of Indian Premier League team Royal Challengers Bengaluru by a group including Crystal Palace’s David Blitzer from drinks giant Diageo, or Vinod Khosla’s near-$10bn bid for NFL champions the Seattle Seahawks.
But beneath that tip, the emergence of sport as an asset class has created a vast iceberg of investments at more modest price points – relatively speaking. For between £50m and £100m, there have been a number of sales across sport in recent months that speaks to a new level of interest in both established and challenger sports.
So, what can investors get for their money?
Prem Rugby club Exeter Chiefs was sold earlier this month for £45m. The Devonshire club ended over 150 years of member ownership in a move that saw Bill Foley’s Black Knight group – which owns both AFC Bournemouth in the Premier League and FC Lorient in Ligue 1 – enter rugby union for the first time.
And it came after a number of valuations were realised by other rugby clubs in England’s top flight – including a similar price point at Bath Rugby after a debt-for-equity part-sale between the incumbent Bruce Craig and appliances tycoon Sir James Dyson.
But rugby in England has been professional for years, and the sale of these clubs represents valuations realised decades into their existence. That is not the case everywhere.
Far newer entities within the asset class such as county-attached Hundred franchises across England and Wales all saw minority stake sales go under the hammer for a minimum of £40m, rising to over triple that.
While those sales had with them the backing of governing body the ECB and existing infrastructure, a four-year-old competition raising £500m from eight stake sales was something not seen before in British sport.
Sport for the future
And what of the brand new offerings? Well they’re exposing the sheer range of what is on the market across the sporting spectrum at the moment.
SailGP is currently closing in on a 14th team to join its fleet, at a price tag of between $75m and $100m. The series is looking to add up to six more before closing its roster for good and, with the likes of Kylian Mbappe mixing it up on the shoreline with funds such as Ares and MSP Sports Capital, it may become one of the hotter properties as scarcity increases.
The newly-formed Premier Jumping League, meanwhile – a Formula 1 of equestrian sports – has just sold its first franchise for $50m, having not seen a day of competition yet.
Throw in the growing trend of takeovers in England football’s third and fourth tier, League One and League Two – where Wrexham’s Rob Mac and Ryan Reynolds took a chance a number of seasons ago – and the price of a Super League rugby league team, which tops at around £25m, and there are plenty of options on the table.
The big ticket clubs and teams will always have the biggest of price tags but in a world where those are becoming more exclusive, a second-tier asset is as accessible as ever and there appears to be no slowing in interest. What is £50m anyway?