Jason Wright on the Business Case for Investing in Women's and Youth Sports

The Rise of Women's Sports Investment

• 💡 The performance of women's sports has been strong for decades, but the economics are now aligning with the quality of the product.
• 🚀 Families have driven a natural fandom, leading to increased sponsorship dollars, attendance, and athlete recognition.
• 🎯 Ariel Investments views women's sports as small caps of sports, offering high growth trajectories due to being misunderstood and undervalued.

Operational Rigor and Profitability

• 📈 Women's sports franchises can be run differently, focusing on operating rigor, dynamic pricing, and customer segmentation to achieve profitability.
• 💰 It is possible for these franchises to be profitable right now, not just in the future, by applying sound business practices.
• 🛠️ The focus is on applying intellectual and relational capital to operate franchises effectively, similar to how men's sports have been developed over decades.

Investing in the Sports Ecosystem

• 🧩 Ariel is investing not only in major women's leagues (NWSL, WNBA) but also in the full ecosystem, including youth sports and supporting businesses.
• 📊 Youth sports are seen as a traditional private equity roll-up play with great margins and cash generation, offering near-term exits.
• 🚀 Investments include acquiring and consolidating youth sports organizations, professionalizing them, and achieving back-office synergies.

Youth Sports: Development and Returns

• 🌟 Youth sports offer good commercial returns for investors, not just social impact, with high margins and cash generation.
• ✅ Businesses like League One Volleyball, built on a large youth sports base, demonstrate the potential for inorganic growth and profitability.
• 🧠 Youth sports are crucial for leadership development, with 70% of female C-suite members having played high school or college sports, highlighting an important leadership pipeline.

Ariel's Value Investment Approach

• 🔍 Ariel's investment in women's and youth sports is a classic example of their value investing strategy, focusing on undervalued and misunderstood asset classes.
• 📈 The firm is bringing scale, focus, and attention to this sub-asset class within sports, which has significant momentum.
• 📊 Evidence of this momentum includes increased attendance in the WNBA and NWSL, significant media deal growth, and a 200% rise in sponsorship dollars for the women's Final Four.