The Rise of Venture-Backed Sports Leagues

Record numbers of sports leagues are popping up and raising venture capital. At Will Ventures, here's how we think about investing in emerging leagues.

Professional sports teams are in high-demand. And for good reason.

According to new research from Arctos Partners & Michigan Ross, North American sports franchise investments have performed better than US equities, the media sector, and nearly every major asset class over the last decade.

So institutional money has lunged to put their money into pro sports. Sovereign wealth funds purchased top European soccer teams. Bulge-bracket private equity firms bought stakes in NBA, NHL and MLB teams. And every sports investor now sits on the edge of their seat as the NFL considers opening its doors to institutional capital.

But recently, entrepreneurs and investors started wondering: what if—instead of investing in today’s largest sports leagues—we built a new one?

Attractive comps exist. UFC, taken over by Dana White in 2001, sold to Endeavor for $4 billion in 2016. The IPL, launched in 2008, is the most-watched cricket league in the world in 2024. Other success stories include MotoGP, Major League Soccer and LIV Golf.

Those successes have inspired a massive wave of emerging sports leagues backed by venture capital and private equity. To name a few:

• In 2021, Overtime launched Overtime Elite, a basketball league for top high school prospects, after raising $240M+ from investors including Blackstone and a16z.

• In 2022, FC Barcelona legend Gerard Pique started the Kings League, a 7-on-7 soccer league, and raised $65M led by Left Lane Capital.

• In 2023, TMRW Sports announced TGL, spearheaded by Tiger Woods and Rory McIlroy, and raised funding from Will Ventures, Dynasty Equity, Connect Ventures, 25madison Ventures and others.

• In 2024, S4 unveiled The Snow League, a ski & snowboarding league co-founded by Shaun White, and raised funding from Will Ventures, Ares Management, David Blitzer, and Ryan Sports Ventures.

At Will Ventures, as investors focused on sports & entertainment, we constantly see startup leagues that are vying to become the next iconic sports property. 

But, every league cannot succeed. And for every UFC there are multiple XFLs.

In this article, we’ll explain the unique challenges of launching a startup sports league, and how we evaluate these investments.

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It’s important to remember: today’s major leagues didn’t become household names overnight. 

The NFL started in the 1920s, but only established itself as a major national sport in the 60s with the start of the Super Bowl era. The NBA launched in the 1940s, but flirted with bankruptcy until the 80s with the Magic-Bird & Jordan eras. Historically, it’s taken decades to build a passionate and loyal fanbase.

But investors don’t have that kind of patience. Venture capital and private equity firms manage 10-year funds and expect exits within that time frame. What’s more, bootstrapping a new league isn’t a viable option. Leagues have to pay athlete salaries, rent stadiums/arenas, cover team travel, produce game content, and hire seasoned executives—often before a single dollar of revenue.

The challenge is: New sports leagues require startup capital, and investors must hold them to the same standard as early-stage tech investments: rapid and exponential growth.

Startup leagues have tried several different tactics to achieve this growth:

• Kings League, Fan Controlled Football, and the Drone Racing League have exploited changing content consumption habits and built digital-first brands

• League One Volleyball, Athletes Unlimited, and Unrivaled Basketball have looked to capture the booming interest in women’s sports

• The Professional Pickleball Association, Power Slap, and Premier Padel have built followings around relatively new sports

• The XFL and The Basketball Tournament have taken advantage of major league offseasons to serve fans their favorite sports year-round

With a variety of strategies at play, emerging sports leagues have become a popular investment theme across sports-focused and generalist funds.

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At Will Ventures, we evaluate new league investments using three questions.

We’re not going to cover the basic criteria underpinning every startup investment: great founders, ability to recruit great operational talent, and access to capital.

Instead, we cover the three elements that we believe determine a new league’s viability:

1. Starting the flywheel: Can the league build a fanbase and drive monetization ASAP?

A new league must drive attention and revenue from the get-go.

Successful sports leagues function as IP flywheels. As a league grows its fanbase, it increases demand for content rights, sponsorship deals, and branded merchandise. This revenue allows the league to reinvest in better content and fan experiences—which grows its fanbase more.

But new leagues face a chicken or the egg problem. To get that flywheel going, you need to organize an entire league, sign a TV deal, land a few major sponsorship deals, and find a merchandising partner—all at once. And that’s not easy!

That’s why some emerging leagues have tried to capture existing fanbases. 

For example, TGL knew that a large, loyal fanbase follows the PGA Tour and LIV Golf. So TGL announced an indoor simulator golf league, expecting that many traditional golf fans will follow their favorite sport in a new format.

Unrivaled Basketball knew that the fanbase for WNBA and NCAA women’s basketball is booming. So Unrivaled announced a pro women’s basketball league during the WNBA offseason, expecting that many fans will follow their favorite players to a new league.

In comparison, relatively new sports such as pickleball or spikeball face uphill battles in educating consumers about their sports and gaining a foothold in their entertainment lineup.

New leagues have also gotten creative with their go-to-market strategies.

For example, the Kings League started by partnering with some of Europe and LATAM’s top influencers, such as Ibai Llanos and Sergio Aguero. These influencers each managed a team and streamed their games on their Twitch & YouTube channels. As a result, Kings League immediately captured a broad audience and signed blue chip sponsors like Adidas and Spotify. Good Good Golf and Creator League have also leveraged influencers’ audiences to build momentum.

The GTM for leagues is not one-size-fits-all. But a league must have a path to build a fanbase, drive monetization, and start their flywheel quickly.

2. Establishing effective governance: Is this league structured for long-term success?

A new league must also have governance that positions it for long-term success.

However, sports leagues are incredibly difficult to structure. That’s because aligning the incentives of investors, team owners, and athletes is no small feat.

The Big 4 North American leagues and European soccer leagues operate as association models. Essentially, the league acts as a non-profit governing body for the team owners (AKA Roger Goodell works for Jerry Jones). The league liaises between the teams and players around contentious questions including:

• Where do costs lie? Are athlete travel, equipment and facility usage covered by the league, players, teams and/or partners?

• How are revenues distributed? Are media rights, sponsorship and other revenues held at the league level, or distributed to the teams, and at what cadence?

• Who holds what decision making power? Who owns each major strategic and operational decision, and what checks & balances exist between each stakeholder?

It’s critical to answer these questions upfront and establish governance that balances the demands of players and owners. Otherwise, players won’t want to play, or owners won’t want to purchase teams (in unionized leagues, this is a lockout). 

Now, here’s where investor-backed leagues get even more complicated.

Association models are not structured to take outside investment because the league does not hold enterprise value. Note: Some leagues like France’s Ligue 1 and Spain’s La Liga have created separate entities to sell stakes in their rights packages. But even in those cases, the league’s goal was to find a strategic partner to grow revenues and deliver them back to the teams.

In order to raise capital, emerging leagues have moved away from the association model and chosen one of two models, each with different benefits:

1. Tour models centralize all operations and finances within one league entity. The advantage is the simplicity of operations: One executive team manages the league’s operations, commercial rights and player relations.

2. Franchise-based models balance the league’s operations and finances across a league and its teams, which both hold enterprise value. The advantage is that franchise-based models can drive growth through team sales.

Both tour and franchise-based models are more complicated than the association model because they add one more stakeholder: investors. VC and PE investors will expect fast growth and path to an exit within their fund lifecycles. As fiduciaries, league executives must operate on behalf of their investors—not just the players and owners.

For long-term success, leagues must have well-formulated governance structures that allow them to balance player, team, league and investor demands.

3. Recruiting talent: Can this league attract and retain their sport’s best talent?

A new league must have a unique ability to attract and retain their sport’s best entertainers. 

Many new leagues are incentivizing athletes with more athlete-friendly terms than the legacy leagues offer. For example, LIV Golf landed Phil Mickelson by offering him a $200 million contract in addition to an equity stake, taking advantage of the deep pockets of its Saudi investors. TGL landed top-5 golfers Xander Schauffele and Wyndham Clark, thanks in part to a meaningful player equity pool.

New leagues have also incentivized players by accommodating their existing schedules. For example, Athletes Unlimited Basketball has run during the WNBA offseason, marketing the chance for players to stay in the US and skip the laborious overseas season.

But the thing that’s even more important than recruiting the tonnage of players is recruiting the sport’s star players. The top athletes drive the lion’s share of attention. That’s why many leagues have come to market with their sport’s stars as early founders, investors, and players. Examples include Tiger Woods & Rory McIlroy for TGL, Shaun White for The Snow League, and Sergio Aguero for the Kings League.

Attaching existing stars to a new league helps derisk media, sponsorship and ticket sales upfront. A major broadcaster like ESPN or a global brand like Budweiser will partner with a new league knowing that Tiger Woods or Shaun White will carry over their massive audience. But these partners will be hesitant to make a bet on a league with no starpower attached.

Whether it’s access to capital, a unique league structure, or stars on the founding team, a new league must have a differentiated moat to recruit their sport’s top stars.

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In summary, at Will Ventures we look for three elements in emerging sports leagues:

1. A strong flywheel to attract fans and drive revenues

2. Effective governance that enables long-term success 

3. A unique advantage in recruiting the sport’s best athletes

The most difficult part of building a new sports league is that the founding team must manage all of these moving pieces at once. We empathize with those challenges and hope to be value-add partners in navigating them.

If you’re building or investing around emerging sports leagues, we would love to meet you.