Last year, Michele Kang bought the Washington Spirit of the National Women’s Soccer League in a deal that valued the club at $35 million while it was still reeling from being implicated in the NWSL’s widespread abuse scandal. The price shocked pundits who pointed to the $2 million NWSL expansion fee in San Diego eight months earlier, as well as the premium to Todd Boehly’s runner-up bid for the Spirit. The value was nearly 10 times the Spirit’s revenue.
A year later, no one is snickering at Kang. League franchise values are soaring, as our first-ever valuation list shows. The NWSL just secured a $53 million fee for an expansion team in Boston, after it sealed the same fee for a club in the Bay Area in April. The Chicago Red Stars—widely viewed as the NWSL’s weakest franchise—just sold for more than $30 million, while the league’s crown jewel, Angel City FC, is raising money at valuations nearing $200 million.
In eight years, the Kang deal might be viewed as the NWSL’s version of the Ballmer buy in the NBA.
In 2014, former longtime Microsoft CEO Steve Ballmer parted with 10% of his fortune to buy the Los Angeles Clippers for $2 billion, just two months after tapes leaked of Donald Sterling’s racist comments that forced a frenzied sale process. The deal smashed the prior record set a month earlier—$550 million for the Milwaukee Bucks—and was at least 25% higher than any other bid. Ballmer paid 12 times the team’s revenue, while the prior five NBA deals were completed at an average of four times revenue.
The Clippers are now worth more than $4 billion after Ballmer secured a new arena, Intuit Dome, set to open next year, while the NBA eyes another blockbuster TV deal. Ballmer’s playbook might be a template for Kang and the NWSL overall, which is closing in on its own new TV deal as several franchises home in on venue upgrades.
Over the last two months, Sportico spoke with more than 30 people in and around the NWSL, including team owners, executives, bankers, lawyers, investors and media consultants to unpack the financial transformation of women’s soccer in the U.S. and what’s ahead.
The average value for a “control” sale of the 12 teams playing this season is $66 million by our calculations. The teams will collectively generate an estimated $112 million in revenue during the 2023 regular season, with playoffs adding to the coffers of teams that qualify. Every NWSL team is losing money—not that much different from MLS or EPL for that matter—but a new group of owners has entered the sport with big ambitions, ready to invest in players, facilities and fan experiences.
“Everything that indicates something is structurally undervalued was flashing green, on every vector,” Alan Waxman, CEO of Sixth Street, told Sportico in April after the private equity giant closed on its agreement to be the lead investor in the Bay Area expansion team. “There’s a bigger structural trend here, where the economics have not yet caught up with reality. The data is just popping off the page.”
California Dreamin’
No club has bigger ambitions than Angel City FC, which is not only the NWSL’s most valuable club, but likely the world’s most valuable women’s team in any sport at $180 million. It approaches ownership and operations more like a startup or tech company than a sports team. ACFC raised money in a “Series A” round in April 2021 at a valuation north of $100 million before it ever played a game.
“I still remember my very first board meeting, and a lot of these owners thought about their teams more like a charity than a viable business,” Alexis Ohanian, ACFC’s lead investor, said in a phone interview. “When you put that kind of ceiling on anything, what can you expect is going to happen? You're going to underachieve, and you're going to underperform. I think it's been great with this new era of owners that have come in, because they all share our same mindset, which is, we're not doing this for charity.”
Ohanian has been an entrepreneur since he graduated from college, including co-founding Reddit and launching venture capital firm Seven Seven Six. “There was pent-up energy for treating women's professional soccer in America like a real business with big enterprise value ambitions,” he said. “There's now a lot more people who see this potential and have been pushing forward on it, and I love it.”
ACFC has 16,000 season-ticket holders and led the NWSL in attendance during its first season in 2022 with an average of 19,105 fans per game—twice as many as any other club besides Portland. Angel City racked up sponsorship deals at unprecedented levels by focusing on traditional sponsors, like Chevrolet, Gatorade, PNC and BMO, but also female consumer-focused sponsors, including shoe brand Birdies and Elizabeth Banks-backed Archer Roose canned wine. Total revenue this season is estimated to be $31 million, with roughly $11 million of that from sponsors—more than some MLS teams.
Angel City has been back in the market raising money in 2023 at valuations approaching $200 million, according to multiple sources familiar with the club’s plans. ACFC would not comment on its valuation or funding round, but it does have a goal of being the first $1 billion club in women’s sports.
Kara Nortman was a managing director at VC firm Upfront Ventures when she co-founded ACFC with Julie Uhrman and Natalie Portman. This year, Nortman launched a new fund with former Causeway partner Jasmine Robinson to invest in women’s sports franchises and adjacent businesses. The Monarch Collective planned to raise $100 million but closed its fund at 40% above the target. Monarch just made its first investment, a minority interest in the NWSL’s new Boston franchise.
“Angel City woke me up,” Nortman said in a video interview. “I realized this is on the right side of consumer trends, consumer communities, and what's happening in the world.”
The San Diego Wave entered the NWSL the same year as Angel City with less fanfare and celebrity backing, but they have deeper pockets thanks to owner Ron Burkle, who is the league’s richest control owner, worth $3.1 billion per Forbes.
The Wave played on the University of San Diego campus last year but moved to the newly opened Snapdragon Stadium at San Diego State at the end of last year. It has turbo-charged revenue with league-leading attendance this season at nearly 20,000 fans per game, many of them there to see a long-time American star.
“Alex Morgan is the biggest player right now in professional soccer,” Jill Ellis, Wave president, said in a phone interview. “She's a key driver behind our strong attendance numbers, not only at home games but also when we play on the road.”
Merchandise and sponsorship revenue have also jumped in Year 2 of the Wave, with total revenue expected to top $16 million this season before the playoffs. The club has been a juggernaut on social media as the top NWSL club by video views and engagement—only Lionel Messi-fueled Inter Miami rates higher by video views if also folding in MLS clubs, according to Blinkfire Analytics.
The Wave are worth $90 million by Sportico’s count, second behind Angel City.
Team Sales
While Angel City and San Diego represent the top of the NWSL financial table, Chicago is the unquestioned bottom with revenue 34% lower than the next lowest club. But swapping former owner Arnim Whisler out for Laura Ricketts’ group has provided hope that the Red Stars will no longer be a financial and organizational eyesore for the league. The Red Stars were put up for sale after the club was implicated in multiple investigations regarding widespread abuse and misconduct in women's pro soccer in the U.S.
Ricketts, who co-owns the Chicago Cubs, bought the team at a $35.5 million valuation in a deal that includes some hefty benchmarks to make the full payout, but the group with deep Chicago ties is investing $25 million to upgrade everything around the team. It’s only one game, but attendance in the first match of the Ricketts era was double the season average.
The Red Stars are valued at $40 million by Sportico and last in the league. That valuation represents the “stick value” for a slot in the NWSL right now.
“The owners and Jessica Berman have done a terrific job building trust and credibility leading to the growth in the league,” said Inner Circle Sports co-founder Steve Horowitz, who led the Boston and Bay Area expansion processes and represented Whisler in his sale. “We’re seeing unprecedented commercial activity, record-breaking crowds, and a feeling among investors that this league is on the verge of something massive. Coupled with a pending media deal, one has a perfect storm.”
There are currently two more NWSL teams on the market: the Portland Thorns ($65 million, ranked fourth) and OL Reign ($49 million, eighth). Both clubs have multiple bidders, and the hope is to have new owners in place by the end of the year. Portland has hired BDT & MSD Partners to run its process, while Seattle fittingly tapped the Raine Group.
Before San Diego and ACFC, the Thorns had been the NWSL’s marquee club on and off the field, with league-leading attendance and three championships, more than any other team. It was implicated in the Yates report detailing abuse in soccer, leading to Merritt Paulson putting the club up for sale. Uncoupling the team from MLS’ Timbers will open additional revenue opportunities for the next owners with suites and sponsorships. Revenue for the Reign ranks in the top half of the league, but they are hamstrung by their stadium situation. They play in the massive home of the Seattle Seahawks and Sounders FC, Lumen Field.
Sportico’s valuations are for a control sale, but teams beyond Angel City have been able to tap markets at higher valuations. It represents a reversal from historical trends that included limited partner discounts. There now can be an LP premium applied in certain cases with a lot of people less sensitive to valuations and willing to write six-figure or even seven-figure checks to be part of an ownership group. There is not a seat at the table for these investors in the NFL or NBA, where valuations are in the multi-billions.
The North Carolina Courage ($52 million, seventh) raised $15 million this summer at a $66 million valuation, and more clubs are headed to the market to raise money to fund their investment.
Sixth Street plans to invest $125 million, including the $53 million expansion fee, to launch its Bay FC team for the 2024 season. The investment opened eyes because the PE firm is certainly not in this for altruistic reasons to support women’s sports. Waxman thinks women’s soccer in the U.S. could be on par commercially with pro men’s soccer within the next decade—the average MLS team is worth $582 million. He points to the 99% of money spent in sports—advertising, sponsorship, media, investment dollars, etc.—focused on men's leagues, and what a game-changer shifting that ratio to 90-10 would be.
"In five years," he said, "people are going to be saying, 'Why wasn't this so obvious when it was happening?'"
Angie and Chris Long are making one of the biggest bets on women’s soccer. The Kansas City Current owners will open their $120 million privately financed stadium next year. It will be the first stadium built specifically for an NWSL team, as well as the first stadium of any kind in downtown Kansas City. Revenue for the Current is expected to more than double next year from its current $10 million as it takes control of all revenue streams, including non-NWSL events. Last year, it opened the first training facility built for a women’s pro team.
“The thing that kept sticking in my mind was facilities are ultimately what changes opportunities and help grow, and we have seen that on the MLS side,” Angie Long said in a phone interview. “When you're in your own home, it's so much more engaging from a fan perspective.”
The Longs built KC-based investment firm Palmer Square Capital Management from $13 million in assets in 2009 to $29 billion now. “We've been a part of big growing things, and this is growing so fast,” Long said. "We are investors at heart always thinking about return on investment, and we want to grow the sport. It didn't take very much investment to really catalyze what is a great product.”
The NWSL story is arguably just in the early minutes. It started play in 2013 after two earlier women’s leagues failed to make it through five seasons. U.S. Soccer essentially founded the league as an extension of U.S. Soccer. The governing body ran the league’s front office and funded the participation of more than 20 players to provide a professional space for members of the U.S. women’s national team, who were assigned to clubs across the league in equal proportions. The overwhelming mantra: Don’t fail. Which meant: Don’t spend much money.
That’s obviously changing with the new owners and the end of the U.S. Soccer relationship after the 2020 season. Jessica Berman has also transformed the league office and received rave reviews since her hiring as commissioner last year. Teams will also be able to invest proceeds from the rising expansion fees with each team receiving their first $5 million allotment in 2023.
But despite the runup in valuations, the NWSL is still a relative bargain by at least one metric. Revenue multiples are the standard for sports team valuations and have soared in recent years due to media contracts and the scarcity value of the assets. NWSL clubs are valued at an average of 7.1 times revenue, which leaves it sandwiched between the NFL and MLB. It is still a steep discount to the 10.2 multiple for MLS teams.
TV Picture
The NWSL faces increased competition from European soccer leagues like the WSL in England, but the league has checked a lot of boxes this year to solidify its future, including the addition of three strong ownership groups with the expansion franchises in Boston, Salt Lake City and Bay Area. There are plans for one more auction to make an even 16 teams for now, but there is still a big item left on the league's 2023 to-do list: a TV contract.
Its $1.5 million-a-year deal with CBS started in 2020 and expires after this season—a since-expired agreement with Twitch pushed annual broadcast revenue north of $2 million before this year. The current deal is a money loser for the NWSL since it is on the hook for production costs. The league wants to announce a new deal ahead of the NWSL championship game on Nov. 11. Last year's title game was moved to primetime on CBS after Ally Financial stepped in with sponsor backing. The game averaged 915,000 viewers, up 71% from the prior year. It is back in primetime this year.
“They're at the highest they've ever been in terms of interest from brands, with more room to grow if broadcast properly,” Daniel Cohen, Octagon media consultant, said in a phone interview.
ESPN is a strong candidate to land a package for the bulk of games, according to multiple sources. These would likely be distributed through ESPN’s linear channels, as well as its ESPN+ streaming platform. Expect at least one or even two more carveouts for another streamer and/or linear partner. The annual value of the new package is still unclear, but the league will likely secure at least 10x its CBS deal.
Dollars are important to any investment thesis, but most teams are preaching the need for relevancy and reach in the next agreement. An extra $250,000 per club is not going to dramatically alter a team's financial picture, but wide exposure will provide benefits on the local level with sponsors. Tickets and sponsorships will continue to be the overwhelming majority of NWSL club revenues after the new TV deal.
“If I'm a network or platform buyer of NWSL, I'm trying to put as much of this on free-to-air and large-reach platforms," Cohen said. "That’s where the money is in the near term with this property and that's where the ROI is for a media company right now—advertising and sponsorship dollars."
One sponsor who has been vocal about its support of the NWSL and women's sports is Ally. Last year, the Detroit-based bank launched a 50/50 media pledge to reach parity across its paid media spending in men’s and women’s sports within five years. It is way ahead of schedule, expecting to hit 60/40 by year-end; it was 90/10 before the pledge.
"There's some level of risk in coming out with such a bold statement in terms of accountability," Andrea Brimmer, Ally CMO, said in an interview. "And it's not easy just because of the unavailability of media. So you have to work really hard to put media packages together to honor the commitment."
Brimmer says other brands—including Google, Michelob Ultra, State Farm, Nike and Delta—have reached out wanting to share strategies. As for the NWSL's next media package, she expects a "significant broadcast expansion" that will have "better distribution" and get more scale for the league.
“We're still in the early days,” Ohanian said about the league overall, “and there's a lot more.”