Sports Teams and Clubs

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 1,100 sports teams in the US participate in live sporting events before a paying audience. The industry includes professional and semi-professional teams but does include leagues. Major sources of revenue include admissions fees; broadcast and other media rights; advertising; events produced under contract; and meals, snacks, and beverages. Major sports include baseball, basketball, football, hockey, and soccer.

Dependence on Broadcast/Media Rights

Broadcast and media rights account for almost one-third of revenue.

High Labor Costs

The sports industry is labor-intensive; labor costs account for about 40% of sales.

Industry size & Structure

The average sports team employs about 75 workers and generates about $38 million annually.

    • The sports team industry consists of about 1,100 firms that employ about 83,000 workers and generate almost $42 billion annually.
    • The industry is concentrated; the top 50 companies account for over 60% of industry revenue.
    • The most valuable NFL teams include the Dallas Cowboys, the New England Patriots, the Los Angeles Rams, and the New York Giants, according to Forbes. The most valuable MLB teams include the New York Yankees, the Los Angeles Dodgers, and the Boston Red Sox.
    • Women’s teams may be part of the same sports leagues as men’s teams (like the WNBA and the NBA) or completely separate entities.
                                Industry Forecast
                                Sports Teams and Clubs Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                May 3, 2024 - Higher Growth Expected for Industry
                                • The US sports teams and clubs industry is projected to grow at a CAGR of 5.5% between 2024 and 2028, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is faster than the overall economy's projected growth. The report noted that consumer confidence levels in the forecast window are expected to improve, which bodes well for the arts, entertainment, and recreation industries. Additionally, consumer sentiment has seen a degree of improvement following sustained lower levels. As noted in the report, many older workers retired in recent years rather than endure pandemic-era employment challenges. The retirement population is expected to continue to rise rapidly as the Baby Boom generation retires. Per the forecast, "Greater opportunity for leisure for this large and growing segment of the population could drive demand for many arts, entertainment, and various recreational activities, particularly those that serve older people."
                                • Recently drafted college basketball superstars such as Caitlin Clark are driving up WNBA ticket sales and raising the league’s profile for the upcoming season, according to SportsProMedia. StubHub has seen ticket sales jump 93% compared to last season, and Clark’s team, the Indiana Fever, has seen a 13-fold increase in sales. The average ticket price for an away Fever game has jumped 80%, reaching an average of $175, the highest of any team. The Chicago Sky has seen sales triple compared to last season after adding college stars Angel Reese and Kamilla Cardoso. The defending champion Las Vegas Aces has seen ticket sales jump 190% compared to the same time last season. According to StubHub’s Adam Budelli, “New stars like Caitlin Clark, Angel Reese, and Kamilla Cardoso are bringing their impact from NCAAW Basketball to the WNBA to continue the surge in popularity that we’ve seen for this league.”
                                • Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
                                • According to a recent ConsumerSignals survey by Deloitte, more discretionary categories, including recreation and entertainment, leisure travel, restaurants, and electronics, represented an estimated 22% share of consumer’s wallets in January, up slightly from a year ago. Global total spending intentions remained consistent in January compared to December and were significantly higher than a year ago, according to Deloitte's Spending Intentions index. Spending intentions have gradually returned to their 2021 levels after inflation curbed global spending confidence. The survey also revealed that over 60% of survey respondents reported their finances had either remained the same or improved in the past year, up from 58% a year ago.
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