Benjamin Harrison, Chief Investment Officer
In an era where traditional investment vehicles are increasingly scrutinised for their volatility and limited returns, alternative assets have emerged as compelling diversification options for sophisticated investors seeking uncorrelated returns. Among these alternatives, sports franchises demonstrate remarkable potential for significant value appreciation and revenue generation that can outpace traditional market returns. Recent developments in the football world highlight this trend, with two particularly illuminating examples: Liverpool FC's commercial ascension and Wrexham AFC's meteoric valuation rise under celebrity ownership.
The Liverpool Model: Commercial Excellence Driving Financial Growth
Liverpool Football Club has established itself as a masterclass in commercial strategy execution within the sports industry. According to the club's official announcement, Liverpool's commercial revenue has surged by an impressive 23% to £272 million for the 2022-23 season, propelling them past rivals Manchester United for the first time in Premier League history.
This achievement reflects several key investment factors:
- Strategic Brand Partnerships: Liverpool's approach to sponsorships has evolved beyond traditional advertising relationships to true strategic partnerships with global brands. Their deal with Standard Chartered, recently renewed at approximately £50 million per year, represents not just financial value but alignment with a global financial institution that opens doors to international markets.
- Digital Transformation: The club has invested heavily in digital infrastructure, creating direct connections with its global fanbase of over 800 million supporters. This digital-first approach has unlocked new revenue streams that didn't exist a decade ago.
- Diverse Revenue Generation: While matchday revenue remains important, Liverpool's success demonstrates how modern sports franchises can generate significant value through media rights, merchandising, and digital content creation.
For investors, Liverpool represents the potential of established tier-one sports assets when operated with commercial excellence. The club's ability to grow revenues even during challenging economic periods underscores sports franchises' resilience as investment vehicles.
The Wrexham Phenomenon: Value Creation Through Storytelling
On the opposite end of the spectrum, Wrexham AFC provides a fascinating case study in rapid value creation through innovative approaches to sports ownership. When Hollywood stars Ryan Reynolds and Rob McElhenney purchased the struggling fifth-tier club in November 2020 for approximately £2 million, few anticipated the extraordinary transformation that would follow.
Industry analysis suggests the club could now be valued at nearly £300 million—a staggering 15,000% increase in just over four years. This remarkable appreciation stems from:
- Content Monetisation: The "Welcome to Wrexham" documentary series transformed a little-known regional club into a global brand, creating a new fanbase and revenue streams. This content-first approach represents a paradigm shift in how sports assets can be monetised.
- Authentic Storytelling: Reynolds and McElhenney demonstrated that an authentic emotional connection to sports can be translated into tangible financial value. Their genuine passion for the club's journey resonated with audiences worldwide.
- Multi-Channel Growth Strategy: Beyond traditional football operations, Wrexham has developed multiple growth channels including merchandise sales, tourism to the region, and international marketing partnerships.
The Wrexham case illustrates the extraordinary potential for value creation in "undervalued" sports properties when combined with innovative marketing, content creation, and authentic storytelling.
Key Investment Insights for Sports Consideration
For sophisticated investors and their financial advisors considering sports franchise investment as an alternative asset class, several key principles emerge from these case studies:
- Operational Excellence Matters: Liverpool's commercial success didn't happen by accident. It required professional management, strategic vision, and execution excellence. When evaluating sports investments, the quality of the operational team is as important as the historic brand value.
- Community Connection Drives Value: Both Liverpool and Wrexham demonstrate that an emotional connection to community, whether local or global, translates directly to financial returns. Sports franchises that authentically cultivate community relationships build resilient value.
- Content Is the New Stadium: While physical assets remain important, the Wrexham example demonstrates that content rights and storytelling can create value far exceeding traditional revenue models. The most valuable asset may not be the stadium or team but the narrative rights.
- Multiple Exit Pathways: The growing institutional interest in sports franchises has created diverse exit options for investors. The buyer pool has expanded dramatically from sovereign wealth funds to private equity and celebrity investors.
Our Approach to Sports Investment Opportunities
We recognise that sports investments represent a unique alternative asset class that combines exceptional financial return potential with prestige ownership and community impact. Our approach is built on three decades of experience navigating complex alternative markets:
- Proprietary Opportunity Sourcing: Our global network provides exclusive access to sports franchise opportunities before they reach public markets, creating substantial alpha generation potential for our select clientele.
- Comprehensive Due Diligence Framework: Our investment team employs a proven framework to analyse financial performance and growth potential across multiple revenue streams, regulatory considerations, and long-term value creation opportunities.
- Strategic Partnership Network: We leverage our relationships with sports management experts, media rights specialists, and brand development professionals across Australia, Europe, and North America to maximise value creation post-acquisition.
- Innovative Financial Structures: We develop bespoke investment vehicles that allow sophisticated investors and family offices to participate in sports ownership opportunities at various commitment levels
Conclusion: The Evolving Investment Thesis for High Net Worth Portfolios
The contrasting examples of Liverpool and Wrexham illustrate the breadth of opportunity within sports franchise investment. Whether through operational excellence at established clubs or transformational vision at undervalued properties, the potential for significant returns exists across the spectrum.
For high-net-worth investors and family offices seeking genuinely differentiated return drivers, sports franchises offer a compelling alternative—one built on passionate fan engagement, diverse revenue streams, and the universal appeal of athletic competition. As traditional markets face continued uncertainty and higher correlations across conventional asset classes, sports franchises represent not just a diversification play but potentially a cornerstone of future portfolio growth for sophisticated investors.
For financial advisors, introducing appropriately structured sports franchise investments to suitable clients can demonstrate value beyond traditional portfolio construction while potentially enhancing long-term returns.
