By Jefferson Dafydd
In 2022, Jeff Moorad argued that sports had completed a transformation few investors would have imagined a generation earlier. Teams and leagues were no longer viewed primarily as passion assets owned by wealthy individuals for prestige, civic pride, or personal affinity. Sports had matured into a legitimate institutional asset class.
Professional franchises had delivered extraordinary long-term appreciation. Valuations continued to rise regardless of on-field performance. Revenue streams became increasingly diversified through media rights, sponsorships, licensing, premium hospitality, and new forms of fan engagement. Scarcity created pricing power. Sophisticated ownership groups replaced many of the emotionally driven operators who had historically governed the industry.
The investment question shifted from:
“Do I want to own a team?” to “Should sports be part of my portfolio allocation?”
That was a profound change in how investors viewed the industry. Over the last several years, however, a second question has emerged:
“What happens when investors become priced out of the blue-chip assets?”
NFL franchises routinely command valuations measured in the billions. The NBA’s Los Angeles Lakers recently changed hands at a reported $10 billion valuation. Expansion fees across mature leagues continue to rise, and premium global soccer assets attract investors willing to pay extraordinary premiums for scarce opportunities. As valuations have climbed, many investors have been forced to look beyond the traditional major
leagues in search of the next generation of sports value creation.
For these investors, the challenge is no longer determining whether sports belong in a portfolio. The challenge is identifying where future growth will come from.
Increasingly, that search is leading investors toward what many in the industry refer to as Growth Sports: challenger leagues, emerging professional properties, innovative competition formats, women’s sports properties, and global sports pursuing expansion into new markets.
Viewed individually, these investments may appear unrelated. Viewed collectively, they reveal a broader capital allocation trend.
The continued maturation of Growth Sports is creating what can best be described as the Sports Middle Class.
Similar to the rise of the economic middle class during the Industrial Revolution, when expanding markets and new infrastructure created opportunities for a previously overlooked segment of society to generate wealth and influence, the sports industry is developing its own middle layer of investable assets.
These properties sit between grassroots participation and major league scale. They are not amateur endeavors. They are not hobby projects. And they are not yet fully mature sports enterprises. Instead, they represent organizations attempting to transform demonstrated demand into sustainable enterprise value.
The emergence of this Sports Middle Class can increasingly be observed through many of the same indicators investors use to evaluate more mature asset classes.
Expansion fees are rising. Franchise transactions are becoming more frequent. Institutional ownership groups are replacing founder-led structures. Dedicated sports investment funds are deploying capital further down the sports ecosystem. Media rights agreements are becoming more sophisticated. Sponsorship revenues are accelerating.
In many cases, the underlying sports themselves are not new. The investment frameworks surrounding them are.
Evidence of this shift can increasingly be found in capital markets activity.
Purchased by Joe Lacob and Peter Guber for $50 Million in 2023, the WNBA’s Golden State Valkyries made global sports history by becoming the first women’s professional sports franchise ever to reach a $1 billion valuation. Unrivaled reportedly reached a valuation approaching $340 million before completing its second season. Franchise transactions in the Pro Padel League have approached eight-figure valuations despite the sport’s relative infancy in the United States. League One Volleyball raised more than $100 million to build an integrated youth-to-professional ecosystem, while investors continue to deploy capital into properties ranging from SailGP and Major League Pickleball to emerging women’s sports leagues and innovative competition formats.
Individually, these transactions may appear unrelated. Collectively, they suggest investors are increasingly willing to underwrite the future growth of sports properties that sit outside the traditional major league ecosystem.
What unites these investments is not the sport itself. It is the investment thesis. Investors increasingly evaluate these properties using many of the same criteria traditionally applied to major league assets: revenue growth potential, media distribution, sponsorship scalability, ownership quality, intellectual property strength, fan engagement, and long-term enterprise value creation.
The most successful among them are not necessarily creating new sports. They are professionalizing existing ones.
Media strategies are becoming more sophisticated. Sponsorship platforms are expanding. Ownership groups are becoming increasingly institutional. Participation ecosystems are strengthening. Commercial infrastructure is maturing. Investment capital has noticed.
This distinction matters because the Sports Middle Class is not simply another way to describe emerging sports. Many Growth Sports will never become durable businesses. Novelty alone rarely creates enduring value. Sustainable growth requires infrastructure. It requires governance. It requires commercial sophistication. It requires stakeholder alignment. Most importantly, it requires the ability to convert participation, fandom, and audience attention into repeatable economic outcomes.
That is the transition many Growth Sports are now attempting to make. In many respects, the rise of the Sports Middle Class mirrors the broader evolution of sports as an asset class itself.
The first chapter was convincing institutional investors that sports belonged in their portfolios. The next chapter may be determining which Growth Sports possess the infrastructure, leadership, and commercial foundations necessary to become the next generation of meaningful sports assets.
If Jeff Moorad’s contemporaries helped establish sports as a legitimate asset class, today’s investors face a different challenge. The question is no longer whether sports belong in a portfolio.
The question is which sports assets possess the infrastructure, governance, audience development systems, and commercial foundations necessary to become tomorrow’s blue-chip properties.
Not every Growth Sport will make that transition. Most will not. But the emergence of a Sports Middle Class suggests investors increasingly believe some will. And that belief is beginning to reshape how capital is allocated across the sports industry.
Sports as an asset class was the beginning of the story. The rising Sports Middle Class may be what comes next.
About the author
Jefferson Dafydd is a veteran sports business executive and strategic advisor with more than 30 years of experience across the rapidly evolving major league and emerging sports property industries. Dafydd has designed revenue systems that convert momentum into sustained commercial performance.
