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Sixth Street Partners will be the first institutional investor to become the majority owner of a professional US sports franchise after it committed $125mn to buy a new National Women’s Soccer League club.
The deal underscores the push by private capital into sports management. The overall investment includes a record $53mn league expansion fee — the price paid to enlarge the collectively owned league by adding a team. That marks a 10-fold increase from expansion fees paid in 2020.
Private capital groups have a history of owning sports teams in Europe and Asia, but they were prohibited from investing in US professional sports until 2019, when Major League Baseball became the first league to amend its ownership bylaws to allow it. Many other US leagues have quickly followed suit — in the face of rapidly rising team valuations, more lucrative broadcast rights agreements and the onset of the coronavirus pandemic — although private capital has largely been relegated to remaining passive minority investors.
Jessica Berman, the NWSL commissioner, said it was “proud to pioneer this for domestic leagues in the US, because we think this is likely we are tackling issues that other leagues are wrestling with”.
Alan Waxman, chief executive of Sixth Street, said it was investing with the intent to own the franchise for a minimum of 10 years. The league, having only launched in 2012, is catching up with its men’s counterpart, Major League Soccer, which began play in 1996.
“We think it’ll be 10 years before the NWSL becomes at parity with every metric with the MLS. That’s team valuations, media revenue, sponsorships,” Waxman said.
The NWSL franchise being purchased by Sixth Street, an as-yet unnamed club that will be based in the San Francisco Bay Area, will become the league’s 14th team. Other minority investors and board members for the team are former Meta executive Sheryl Sandberg, former Golden State Warriors and NBA executive Rick Welts, and four former US women’s national team members with ties to the region: Brandi Chastain, Leslie Osborne, Danielle Slaton and Aly Wagner.
Waxman, a Bay Area resident, said he was drawn to the investment after his wife convinced him to meet the four former players who had been leading the effort to bring a team there. Sixth Street has long-term investments with Real Madrid and FC Barcelona, as well as with the NBA’s San Antonio Spurs.
The launch of the NWSL franchise, which will begin play in the 2024 season, comes at a pivotal time for the league. Since 2021, the NWSL has been reckoning with a systemic abuse scandal that led to the departure of previous commissioner Lisa Baird, the resignation or firing of several team coaches and the forced sale of two existing teams, the Chicago Red Stars and the Portland Thorns. The league is still in the process of evaluating buyers for those two clubs.
“We’re not looking for the historical women’s sports investor who was here because they had a granddaughter or a daughter or because it’s a social cause,” said Berman. “This is a business. We expect sophisticated people to want to invest and believe in the value proposition and see all the trends that [Sixth Street] has talked about as the basis for justifying the valuation for their investment.”
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