The growing value of sports teams – and how you can get involved

Sports franchises are gaining traction as a valuable asset class, with team values surging in the past decade. This follows a trend of record profits across global sports. Top-tier teams are worth billions of dollars, with average franchises pulling in hundreds of millions in revenue.

Here’s a look at the impact on franchise values in American sports over the last decade.

Once a matter of pride or prestige, investing in a franchise is now clearly an investment category. Take David Beckham. In 2014, he secured the rights to own an MLS expansion team. Four years later, he invested $25 million as part of the group that founded Inter Miami CF.

By 2022, Inter Miami CF was valued at $600 million. The team’s valuation jumped to $1.03 billion after Beckham helped recruit Lionel Messi.

American sports franchises aren’t the only teams surging in value. Some of the most valuable clubs in the world are located across the pond.

Franchise Value Continues to Surge

A number of investments are coming in and around the Premier League, English football’s top flight. Fan-driven growth has turned the league into the world’s most watched and richest.

During the 2022-23 season, Premier League teams posted record revenue of $7 billion. This number is up from $2.5 billion  a decade ago.

Television rights deals generate a lot of value. The Premier League has secured some of the most lucrative in global sports, with broadcast rights exceeding $12 billion. The league now reaches 643 million homes in 212 territories—a potential audience of 4.7 billion people. No league has a higher per-game value.

This revenue growth has led to corresponding jumps in franchise value. Six of the world’s 10 most valuable football clubs play in the Premier League. Overall, the top 10 Premier League teams boast an average value of $2.7 billion.

Consider Manchester United, which became the first football club to be valued at £1 billion ($1.25 billion) in 2015. Today, the Premier League club is valued at $6 billion, a 380% increase in value in under a decade.

Of course, Manchester United is an outlier, the highest valuation in the world. Even the lower half of the Premier League carries an average valuation of $456 million. 

Now all sports investments come with risk. Much of the value is tied to the performance of the team, especially in English football where promotions and relegations mean a team can surge or drop in value virtually overnight.

For example, Leeds United was valued at $640 million in 2022 while in the Premier League.  After relegation to the EFL Championship, their value dropped to $214 million, resulting in a loss of value for investors.

All of this growth - in revenue, in media rights, in club valuations - is ultimately driven by fan demand. Now innovative new models are allowing fans to become a bigger part of the fabric of the entire sport—including ownership.

Putting Fan Ownership Within Reach

Large investments require capital, which has long been reserved for the wealthy. Yet it’s not just successful businessmen getting involved in sports ownership. In fact, football clubs have set a precedent for fan-ownership models—a model that’s growing in popularity.

In 1998, Germany created the 50+1 rule, which requires that the club’s members—the fans—must own at least 50% plus one additional share of the voting rights in the club. Fan-members have a majority stake and control over the club, which protects the democratic nature of German football while preventing private investors from taking full ownership.

In Spain, Real Madrid is also owned by its members. The club’s 91,000 “socios” have voting rights and help approve their team’s budget and strategy. That might just be why Real Madrid is now the highest revenue-generating football club in the world. 

These aren’t the only fan-owner models. Here at Republic, we’ve provided several deals where fans had the chance to back their team via a personal investment.

Seedrs, our UK affiliate, helped AFC Wimbledon raise more than $4 million from 5,000 investors to build a new stadium. The photo below shows the Investor Wall at the new stadium.

As AFC Wimbledon chief executive, Joe Palmer, said about this achievement, “One of my favourites was the opportunity for fans to get their names physically stamped on the fabric of Plough Lane so generations to come will always be reminded of who helped bring us home.”

Orange County SC, a US team that plays in the USL Championship (one tier below Major League Soccer), raised nearly $595,000 with the help of 1,463 investors on Republic.

Soon we’ll be giving Republic investors a more prominent opportunity to join the ranks of football owners.  Keep an eye out for details in the coming days.

Investing in sports teams does not come without risks. Investors should only invest an amount they can lose. Investing of any kind is risky and may result in total loss of investment.