The Increasing Popularity Of Women’s Soccer Heralds A Surge In Investment Opportunities – Sport

This spring, the National Women’s Soccer League (NWSL), the
top professional women’s soccer league in the United States,
will kick off its eleventh season of play. It is by far the
longest-enduring and most successful professional women’s
soccer league in U.S. history, and appears poised for significant
growth in its viewership, fan engagement, and financial strength in
2023 and 2024. Savvy investors and entrepreneurs are looking
increasingly toward women’s soccer as an area of great
potential growth in the coming years, and for good reason.

Data suggest that in the United States, women’s sports in
general, and soccer as a sport (both men’s and women’s),
are reaching record levels of popularity, with little indication of
a slowdown in either of those trends. According to a November 2022 report by television analytics
firm Samba TV, TV viewership of women’s sports exploded in
2022, with audiences for the Women’s March Madness tournament,
the WNBA Finals, and the NWSL Championship Game all increasing by
wide margins year-over-year. Viewership of the NWSL Championship
Game in particular grew by an astounding +453% year-over-year from
the 2021 iteration. (For comparison, the 2022 Cup Final for Major
League Soccer, the top men’s league in the U.S., saw a +15%
year-over-year increase in TV viewership.) The recently concluded
2022 FIFA Men’s World Cup tournament similarly drew record TV ratings, both for games
featuring Team USA and for games between other nations, and the
U.S., along with Mexico and Canada, is slated to host the next
Men’s World Cup tournament in 2026, with the majority of the
game venues being in the United States.

American soccer fans won’t need to wait until 2026 to enjoy
top-level international soccer again, however, because the
Women’s World Cup Tournament will take place in Australia and
New Zealand in the summer of 2023. The long-dominant U.S.
Women’s National Team, who will be at the center of attention
for most American viewers, features a number of celebrity players
who, both before and after the tournament, will be playing for NWSL
teams all over the country. Players like Megan Rapinoe (OL Reign,
Seattle), Crystal Dunn (Portland Thorns) Sophia Smith (Portland
Thorns), Alex Morgan (San Diego Wave) and Mallory Swanson (Chicago
Red Stars) are all likely to feature heavily in the World Cup,
before returning to their clubs to finish the NWSL regular season
and playoffs. The alignment of the World Cup this year with the
ongoing explosion of popularity of the sport overall should excite
club owners, managers, investors, lenders, and advertisers: as the
World Cup brings the sport and these players to ever-larger
audiences and new fans, all these groups will have a critical
opportunity to generate value and capture new audiences in the
run-up to the tournament and in its aftermath.

The opportunities are not limited to those with direct
involvement in the NWSL or the sports industry. With increasing
demand for women’s soccer around the country comes an ancillary
demand for a wide range of other services and facilities. The NWSL
is widely expected to be preparing to expand into
two new markets in the spring of 2024, with further expansion
likely over the coming years. New clubs will need stadiums to play
in, specialized training facilities and equipment to practice with,
vendors to purchase from, and retail spaces from which to sell
merchandise.

A team moving into an existing stadium will likely wish to
undertake improvements to the décor and signage at a
minimum, any may also make upgrades to the seating layout, field
surface, and other elements of the facility to better accommodate
the new team. Some teams have gone further and decided to build
entirely new stadiums. Lynn Family Stadium in Louisville, Kentucky
was completed in 2020 by an ownership group which owns both Racing
Louisville FC of the NWSL and Louisville City FC of the USL
Championship (the men’s Division II league in the U.S.), and
remains the home of both clubs. The stadium holds nearly 12,000
spectators, with room for several thousand more when it is set up
for concerts and other non-sporting events. The Kansas City Current
is in the process of building an 11,500-seat
stadium in downtown Kansas City, Mo., which, upon opening in
2024, will be the first stadium purpose-built for a women’s
sports team in the world. These projects represent huge capital
investments in the clubs they host and in the markets where they
are located, and directly and indirectly create business and job
opportunities in the construction, manufacturing, retail,
hospitality, and commercial real estate industries.

Despite the accelerating attention to and investment in
women’s soccer, the costs of investing in women’s soccer
remain low as compared to other major professional sports in the
United States. Viewership of women’s sports continues to lag
dramatically behind that of men’s sports, and soccer has yet to
surpass any of the “big four” American pro sports
(basketball, baseball, football and hockey) in total viewership.
American soccer teams are estimated to have substantially lower
valuations than other pro sports teams. The most valuable American
soccer club, Los Angeles FC (LAFC) of the MLS, was estimated by Sportico in 2021 to be worth $900
million, making it the 109th most valuable sports franchise in
North America, behind every NFL, NBA and MLB team, and comparable
to some of the most valuable NHL franchises.

But this picture is changing quickly. LAFC did not exist until
2014, and only began play in the MLS in 2018, but is already valued
at close to one billion dollars. The NWSL was established in 2012,
and until recent years, even its top clubs were often valued at
under $10 million. By early 2022, the Washington Spirit
(Washington, D.C.) had reached a reported valuation of $35 million,
and New York/New Jersey-based Gotham FC was reportedly worth $40
million. Even more dramatically, one of the league’s newest
teams, Angel City FC-which shares a home stadium with LAFC and
boasted the league’s best average attendance in 2022 at over
19,000 per game-was valued at a league record $100 million in
2021. As the NWSL continues to expand into new markets, and as
increasing numbers of fans and consumers begin paying attention to
women’s soccer in the U.S., these numbers are sure to rise
further.

The rising tide of soccer in America and the explosion of
interest in women’s athletics are combining to create an
environment of fast growth around women’s soccer. With the
Women’s World Cup around the corner, and the likelihood of
expansion of the NWSL into new markets in 2024 and beyond, there
are good reasons to pay close attention to women’s soccer as an
area of opportunity in the months ahead.

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