The Business of Sport Is Changing: Athletes, Agents and Operators Are Becoming Investors

Prepared by Matt Krog | Aus Sports Law

The sports industry is undergoing a significant commercial shift.

Athletes, agents, coaches, creators and operators are no longer content with just participating in sport itself. More industry participants are becoming investors, founders, shareholders and business owners around it.

Across Australia and globally, investment in sport is expanding well beyond teams and leagues.

We are seeing increasing interest in:

• sports tech;

• performance and wellness businesses;

• sports media and content platforms;

• women’s sport;

• athlete-led brands;

• sporting facilities and infrastructure; and

• businesses being built around sporting audiences and communities.

  
  

Australia still feels relatively early in that evolution, which probably creates more opportunity than many people realise.

Investment Opportunities in Sport Are Growing Rapidly

One of the more interesting developments in the business of sport is how entrepreneurial the industry has become.

Many modern athletes and sports industry participants are now thinking beyond playing careers and traditional employment pathways. They are building brands, investing capital, leveraging audiences and creating businesses connected to sport.

That shift is creating opportunities across:

• sports startups;

• athlete investment;

• sports technology;

• sports media;

• fitness and wellness;

• sports infrastructure; and

• emerging areas of women’s sport.

  
  

The commercial sophistication of the sports industry today is dramatically different to what it was even five years ago.

Most Sports Business Problems Start With Unclear Expectations

What is interesting is that many of these sports investment and business opportunities are relatively straightforward when approached properly from the beginning.

Most problems do not arise because people started with bad intentions. Usually it is the opposite. The relationship is strong. The opportunity is exciting. Everyone wants to move quickly.

Issues typically emerge later when expectations were never clearly discussed in the first place, including:

• who is contributing what;

• whether value is being provided through capital, profile, time, network or expertise;

• how decisions will be made;

• ownership structures; and

• or what happens as the business evolves over time.

  
  

In sport particularly, relationships often move faster than the underlying business structure.

That can work early on. It becomes far more difficult later when money, growth, pressure or changing priorities enter the picture.

Building the Right Team Around a Sports Business Matters

The people who tend to perform well in this space are usually the ones who build strong teams around them early.

That means surrounding themselves with people who bring:

• commercial experience;

• legal and strategic thinking;

• industry networks;

• operational capability; and

• personalities that help move opportunities forward constructively.

  
  

Sport moves quickly and good opportunities often require decisive action.

But it is always valuable to have detail-oriented people involved who can identify risks early and prevent issues becoming immovable problems later on.

The Future of the Sports Industry Will Favour Commercial Thinkers

The next generation of successful sports industry participants will probably not just be the best performers on the field.

They will be the people who understand how to build, invest in and grow businesses around sport as well.

The business of sport in Australia is becoming increasingly sophisticated.

The people who recognise that early, and structure opportunities properly from the beginning, will likely be the ones best positioned to capitalise on what comes next.