Speaking with Lawyers Weekly, Deanna Constable and Jared Smith, partners in Lander & Rogers’ corporate team, and Amelia Lynch, partner and head of the firm’s sport and leisure group, provided insights into the key trends, current challenges, and the most promising developments set to shape and define the sports M&A market this year.

The rise of sports M&A deals

Constable noted that the rise in sports M&A deals can be attributed to the growing value of sports teams, driven in part by their dedicated fanbases and the expansion of digital media platforms.

“Sports teams have become more valuable in recent years, spurred by loyal and engaged fan bases, and digital media allowing viewers to feel closer to the ‘action’ and creating a greater sense of community,” Constable said.

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She also expressed that the “significant shift in the public perception of women’s sport” has been a key catalyst in the evolution of the sports M&A market. This transformation is evident in milestones such as “Time magazine [naming] Caitlin Clark as its 2024 Athlete of the Year” and “women’s sport coverage tripling since 2019”.

Constable went on: “The development and market acceptance of professional women’s teams has created a new ‘business line’ in the sport sector, which is attracting a surge in investment activity among a growing group of investors.”

Lynch highlighted that the growing influence of “private capital in sports ownership” is becoming an increasingly prominent factor in the evolution of sports M&A, “particularly internationally, with league operators increasingly likely to consider private equity investment”.

However, she did note how for Australia, “this is still a developing area, and it is not yet clear whether the investment will grow sport in a way that is beneficial for all stakeholders, or just grow one piece of the pie”.

Key trends

Several key trends are set to shape the sports M&A market in 2025, with Smith identifying that one emerging trend is the “rise in investor groups taking ownership interests in a network of sporting clubs”.

He said: “These multi-club ownership groups are enabling owners to hedge their investment across leagues in different jurisdictions, leverage off multiple brands, and foster player development through the transfer of players within the same ownership structure”.

Constable revealed another significant trend shaping sports M&A deals this year will be the increasing role of family offices in sports investments.

She cited the acquisition of the Women’s National Basketball League (WNBL) as a significant example of this expanding investor group making its presence felt in the market.

“One of Australia’s most high-profile sports M&A deals of the last 12 months, which we advised on, was the acquisition of the Women’s National Basketball League (WNBL) by a syndicate led by family office Wollemi Capital Group, in partnership with the National Basketball League (NBL), which is also owned by a family office,” Constable said.

Through observing such deals, Constable expressed how it demonstrates the “rising popularity of sport as an asset class among a growing pool of investors, and how these investors are structuring their portfolios to allow consequent sharing of investment commitment and risk”.

Challenges

Despite its rapid growth and the wealth of opportunities it offers, the sports M&A market is not without its challenges.

Constable emphasised that the complexity of deals remains a major challenge, one that will continue to shape the landscape in 2025.

“From a lawyer’s perspective, sports M&A deals are rarely straightforward and require navigating a variety of legal and commercial factors both during and following a merger or takeover,” Constable said.

She highlighted that these factors include “understanding the complex regulations pertaining to a particular code, including governance of integrity and betting; and negotiating with numerous stakeholders”.

Smith identified that a significant obstacle in sports M&A deals is the critical process of “performing due diligence” to assess both the league and the individual clubs involved in the acquisition.

To address this challenge, he emphasised how it hinges on a deep “understanding of the regulatory landscape, as well as the growth and alignment of values of the league itself and how the club fits into that context”.

Lynch also noted that the relationship dynamics within the sports industry present both a strength and a challenge, one that must be carefully navigated and kept in mind throughout the year.

“Knowing how to identify and pursue common goals is key to achieving a mutually beneficial outcome and ensuring a club, league or governing body is set up for future success under its new ownership,” Lynch said.

Promising areas

As interest in sports investment continues to surge, several promising areas are emerging for M&A activity in 2025.

Smith highlighted an exciting opportunity in sports investment this year lies in its capacity to “nurture new talent and drive growth in previously underrepresented areas, such as youth and women’s teams”.

Another exciting trend Smith highlighted is the growing presence of athletes stepping into the role of investors within the sector.

“With athletes receiving higher salaries across more sports, successful athletes are increasingly becoming investors themselves ─ which is creating a certain alignment between clubs, players and owners,” Smith said.

Lynch also points to the growing diversity of investors in the sports and leisure industry, which is changing the profile of the market.

“Increased participation in the sport and leisure industry from a diverse range of investors means more passionate people are becoming involved in the business of sport, which is changing the profile of the industry,” Lynch said.

“The outlook for M&A activity in the sport and leisure sector looks very positive for the year ahead; sport is a resilient asset class, as viewership grows and media rights continue to rise in value.”