Sports Investments on a Wobble
Blain’s Morning Porridge April 17th, 2026: Sports Investments on a Wobble
“I skate to where the puck is going to be, not where it has been.”
I have no interest in golf – it’s a good walk spoilt. But the rumoured collapse of the rogue LIV Golf Tour, and the disinterest fans are showing in attending Trump’s price-gouging Football World Cup, may be hints the sports investment bubble is about to burst. If it does, it could trigger a confidence wobble across private capital. It could also spell opportunity!
One of the more esoteric markets I follow is Sports – watching how much teams sell for, the revenues top stars can command from monetising their brands, and how the cash flows (and property sales) from infrastructure investments like stadiums can be captured for funding. The value of teams and stars is immense. It’s a fascinating market and it’s no wonder there are a significant number of investors focused on sports investment opportunities.
The rationale is to capture the cash generative power and potential returns from monetising fandom, media and advertising rights. These are huge. Hedge funds like CVC and private capital have bought up teams and events across the sporting spectrum; including Football, Formula 1, Rugby and some of the more niche spectacles including my particular passion, Sailing.
But suddenly the mood has started to turn…
The headlines about the imminent collapse of the rogue LIV golf tour if Saudi Arabia’s PIF pulls its $5bln funding highlights how shaky the anticipated returns on sports investment may be – and how geopolitical realities suddenly intrude. Yesterday it was announced that English Premier League Football Teams lost an combined £800mm last year, despite being the most watched league on the planet – and the billions of pounds that Sovereign Wealth Funds and others have poured into them.
Top level teams lose money because of the rising cost of the talent in a competitive space. The issue of profitability is not selling season tickets to die-hard fans – demand is sky-high, which impacts the demographics. I’m told the average age of Rugby fans paying £200 a ticket for a 6-nations match at Twickenham is now 65+! Prices are so high young folk will be lucky to ever get to attend top-flight events.
This morning I’m reading about a US hedge fund, Eagle Point, which is funding flipped FIFA World Cup tickets at 100% of face value to sell at massive mark-ups for this year’s World Cup. While every real footie fan says World Cup prices are too high, Eagle Point reckon FIFA undervalued ticket prices. FIFA’s dynamic pricing system means $4,000 tickets for the Final are selling at $10,000 – Wowser! The Yanks think they’ve found a gold mine.
Sadly, for football fans, the Americans know the price of everything, but the value of nothing.
Does price gouging count as a success? US hotels and tour operators are whining that that foreign football fans aren’t buying their massively expensive hospitality packages. Unless demand picks up, the hotels will be empty. I’m not the only Scotsman who won’t be travelling to the USA this year to be ripped off on tickets, hotels, travel, tips, and the risk that as one of a very few Celts that doesn’t turn bright pink in the sun my sun-tan might get me a free holiday in a Texas Warehouse “facility” courtesy of ICE. The Trump factor is important; even though American’s know nothing about the beautiful game, Trump says he’s throwing the World’s biggest party.
What if no one comes?
Smart investment, rational economics, financial common sense and sports are not natural bedfellows. While the individual sportsmen and women are absolutely dedicated to being the best, and fans show absolute loyalty even to hopeless losers like Spurs (“My old man said be a Tottenham fan” …. I can’t print the rest of that ditty), a significant portion of sports ownership is still executed on a vanity, ego driven basis.
I listened to a fascinating lecture on Sports Economics hosted by the Society of Professional Economists yesterday. Prof Stefan Szymanski of Michigan University highlighted how many football teams go insolvent, especially when they are relegated. Across Europe there are 725 top tier football teams across 54 associations, and since 2010, 277 have gone bust. The professor argues that’s not a bad thing – invariably new owners emerge to build up insolvent clubs. Historically there are people with more money than sense, and big egos, willing to finance football clubs.
That is beginning to change as data and hard-nosed cash management comes into play – witness the success of my fitba’ team, Heart of Midlothian (the “Jambos”), which is leading a close race at the top of the Scottish Premier league. Bought by canny Brighton FC owner Tony Bloom, Hearts have used data-rich modelling to win games (focused on fitness and stamina), and to sign underpriced young players to resell. I met one of the data team earlier this year, and it was fascinating to hear how they do it.
If the Jambos do win the SPL – and they have form in snatching defeat from the jaws of victory – it will be the first time since 1985 that Rangers or Celtic hasn’t lifted the cup. (The SPL is now in a complex 5 match end of season playoffs where the top 6 teams play only each other to decide the championship – Hearts, the Huns, and Celtic are within a point of each other.)
And any sports investment is full of human risks desk bound financial analysts just don’t get. Sailing is my passion but knowing the personalities and how business works I wasn’t that surprised when Jim Ratcliffe of INEOS fell out with Ben Ainslie over funding a third pop at the America’s Cup. Ratcliffe claims to own the boat (which will race again next year) and the data that drives it – which he values at £180mm. If he was to try and sell it on the open market, he’d get a couple of quid, because Ainslie is the only one who knows how to sail it and he owns the right to challenge the Kiwis for the trophy. It will be interesting to watch how that plays out and if there is a compromise to be done?
I’m toying with the concept of writing a book about the workings of modern sports investment. The smart minds at work in the darker recesses of private capital funds understand the enormous value in the public’s addiction to sports, the egos of the owners who bask in the success of their teams, and the genuine good that sports create in terms of well-being and a sense of mental belonging. The psychology of tribes is critical – how much money supporters are willing to part with to be seen supporting their teams, and how that can be monetised.
The monetisation is the difficult part.
The assumption had been that Sports would become increasingly valuable because TV and Streaming can fund them through ever rising advertising revenues. But viewing habits have changed – and advertising flows have moved. Suddenly the billions advertisers would pay up for prime-time slots have shifted to social media. The big sports are seeing the value of the TV franchises tumble.
You Tube can reach the fans – exactly the people firms want to advertise to, but Meta takes the bulk of the money and pays pennies to the content creators in return. The result is less money flowing back into sport, making teams more vulnerable to cash squeeze, and creating breaks in the progression of kids into professional players – which could kill the future of the respective games. (Talk to me some time about what’s going wrong with English Rugby…)
And then there are the No-See-Um consequences of the LIV / PIF shock.
The Saudi’s recognised that sport, at the higher levels, is an instrument of soft power that can burnish national prestige. For instance, think of Brazil and the first thing that will come to mind is not crime or grinding poverty, by their winning football World Cup performances! Sports is especially important for small nations. Witness Norway in the Winter Olympics. Long-term readers of the Morning Porridge will know my love of the Six Nations Rugby… There is nothing quite like the smug joy I feel when tiny wee Scotland hammers the mighty England. (Again, and again, and again….)
Faced with negative publicity, Saudi Arabia made a series of massive investments into global sports – some dismiss it as “sports-washing”, but the stated intention was to unravel the image of a theocratic, misogynistic, backward nation by being seen to embrace a new, modern image as a sporting hub and tourism destination – while also seeking to diversify the economy away from the oil fields. (I genuinely want to go visit real Saudi – not the cities or the tourist facilities, but the historical sites.) Nothing has been off limits for Saudi money; Football, Golf, Formula 1, Cage fighting, Boxing, and even an ill-advised attempt to build a snow sports venue for the Winter Olympics!
LIV has not only split Golf, but it’s been a financial disaster without meaningful sponsorship, a limited TV audience and ruinously expensive player contracts. It’s failed to reach a sustainable mass. I’ve been told – privately – that a deal will be done to keep the rebel LIV golf tour “in play” to save face while LIV reintegrates with the PGA is found. (That was agreed years ago, but the egos at play ensured nothing actually moved together – the problem being the PGA owns golf with 3 of 4 top events in the US, why change?)
On top of underperformance, suddenly the uncertainty in the Gulf has hit. Chill financial winds are blowing. Formula 1 has already suffered. Although there are only four Gulf Grand Prix’s – which account for around 15% of F1 revenues and sponsorship, these nations wield more financial clout as potential investors. I’ve been told at least 25-30% of Formula 1’s current (high) valuations are due to the perception Gulf money is on tap on the basis “the Saudi’s are thinking of buying it”!
If the Saudi’s are willing to give up on Golf… what might go next? Can Saudi continue to pay up for the supposed Soft Power it generates from Sports. It’s clear PIF has been told to reign back spending across the board. That has consequences for the likes of Softbank and its Future Funds, and thus tech. If Sports and Neom, the linear skyscraper city built across the desert, are not financially sustainable, then it begs questions about how the Saudi economy becomes more than just an oil-principality?
And if the Saudi’s and the other Gulf states aren’t buying, then what does that do to private credit portfolios based on sports and other private assets? Could we see fire-sales? If so, then its opportunity! Folk are always going to want to watch and experience the excitement of top-level sport. Maybe sacked Red Bull boss Christian Horner will get a chance to buy something on the cheap to work his way back into F1?
Out of time, and back to the day job.
Bill Blain
Author of the Morning Porridge
CEO Windshift Capital
Advisor – Spitfire Strategic Capital
Please don’t forget about my new book, The Battle For Hamble. It’s a proper grown-up examination of how bureaucracy has failed: a tale of Greedy Corporates, Bad Planning and Economic Illiteracy. It explains how a wholly unnecessary Gravel Quarry will be dug in middle of a prosperous village – putting 6000 jobs at risk. The truth is no one wants gravel, and the quarry company understands it’s not what you dig out, but what you stuff back into a hole in the ground that matters. Gravel sells for £30 a tonne – Landfill earns £150 a tonne to bury. Go figure.