Top class sport has become big business over the past few decades, helping the industry become one of the most lucrative on the planet.
Investment from major broadcasters and global brands are amongst the primary reasons why the sports gravy train shows no signs of slowing down.
With that in mind, we take a closer look at some of the key trends that have powered significant financial growth in the sports sector.
Big Brand Endorsements
As highlighted by the list of the richest athletes in the world, big brands are not averse to pumping millions of dollars into sport.
This has helped sports stars such as Michael Jordan, Tiger Woods and Cristiano Ronaldo amass huge fortunes from their on-field and off-field activities.
Jordan has raked in more than $2 billion in earnings, with his lifetime deal with Nike accounting for a significant portion of his income.
Woods has earned more than $120 million in prize money in golf, but endorsements with Nike, Monster Energy, TaylorMade and others have given him billionaire status.
Ronaldo became the first active team-sport athlete to surpass $1bn in career earnings in 2020, fuelled in no small part to big brand endorsements and his own investments.
LeBron James, Lionel Messi, Floyd Mayweather JR and Roger Federer are other star athletes who have cracked the billion-dollar barrier in earnings.
Many other athletes around the world have also been raking in the cash, but they are not alone in benefiting from outside investment into sport.
Sponsorships & Broadcast Deals
A quick look at the most valuable teams in sport demonstrates the impact sponsorship, broadcast deals and rich owners has had on clubs and franchises.
- Dallas Cowboys – $6.5 billion – NFL
- New York Yankees – $6 billion – MLB
- New York Knicks – $5.8 billion – NBA
- Golden State Warriors – $5.6 billion – NBA
- Los Angeles Lakers – $5.5 billion – NBA
- New England Patriots – $5 billion – NFL
- New York Giants – $4.85 billion – NFL
- Los Angeles Rams – $4.8 billion – NFL
- Real Madrid – $4.8 billion – Soccer
- Barcelona – $4.7 billion – Soccer
North American franchises feature heavily, filling eight of the top 10 places on a list packed with some of the most iconic names in sport.
Each of them are hugely attractive to sponsors and all play in competitions that benefit from lucrative broadcast deals.
For example, a new collective bargaining agreement (CBA) in Major League Baseball may be the catalyst for the New York Yankees to overtake the Dallas Cowboys at the top of the list.
The deal introduces two new streams of sponsorship revenue – jersey patches and helmet decals – both of which will attract big brand investment.
The expansion of the play-offs from 10 to 12 teams and lucrative global broadcast deals should also have a major impact on the Yankees’ future valuation.
Soccer is another sport that attracts huge interest from sponsors and broadcasters, particularly in several of Europe’s top leagues.
Barcelona and Real Madrid both make it into the top 10 most valuable teams in sport on the back of being massive global brands in their own right.
The Premier League and Champions League are other competitions that collectively attract major investment from external organisations.
Big brands such as adidas, Heineken, Red Bull, Coca-Cola, Nike and many more have poured money into European football in recent years.
State-led investment from countries such as Qatar and Saud Arabia has also transformed the fortunes and finances of numerous soccer clubs.
While many people argue the primary motivation for this is to deflect attention away from human rights issues in those countries, it does highlight just how enticing the sports industry is.
