The deal to sell Chelsea Football Club was one of four deals which exceeded £1 billion in the last 12 months (REUTERS)

The deal to sell Chelsea Football Club was one of four deals which exceeded £1 billion in the last 12 months (REUTERS)

The value of M&A and major stakebuilding in the sports industry has increased 433% in the last year, rising from £1.8bn last year to £9.6bn this year, according to research.

Law firm RPC’s report found that the total number of deals into the sports industry grew to 37 in the past 12 months, up from 29 a year previously.

Of those, 24 were M&A deals, involving a change of owners, and four of the deals were worth more than £1 billion, including sales of Chelsea and AC Milan.

Josh Charalambous, senior associate at RPC, said: “Investors in the sports industry view many sports, leagues and individual teams as being commercially underdeveloped and ripe for growth.

“This presents the opportunity for institutions like private equity houses to use their expertise to significantly enhance a club’s business model and transform the businesses’ long-term returns.”

He suggested that investors needed to balance making returns with keeping the core, traditional fanbase of the sport or club happy.

“After the backlash against the European Super League, financial institutions investing in sports are very conscious that they need to bring existing fans with them,” he said.

RPC identified an increasing interest in investment into boxing, where there have been a number of new broadcasting deals being signed, including with sports broadcaster DAZN and Channel 5.

Women’s sport, particularly football, but also rugby and netball, is also being seen as an area of particular growth, with the increasing number of viewers and higher exposure adding significant value to deals across Europe.

Sponsorship deals can also increase the value of sports teams.

Football clubs have already expanded past traditional sectors into more niche sponsorship deals, including official blockchain partners, fan token providers, official wine partner, vaping partner and official mattress and pillow partner.

Other sports are looking to replicate some of this expansion of sponsorship income, RPC found.

Some sponsorship deals – including those involving NFTs and fan tokens – are being structured as revenue sharing agreements which offer the clubs a higher potential upside.

And sponsors are willing to pay more for deals where they can build up a longer-term relationship with fans, for example, in financial services.