'SPORT WASHING'
Boosting national prestige or chasing financial rewards? Exploring sport washing as an investment opportunity and its potential impact on college athletics.
MOVEMENT 005
In recent years, sport washing has emerged as a multifaceted phenomenon, blending the worlds of sports, politics, and investment.
At its core, sport washing operates on the principle of leveraging the widespread appeal and emotional attachment associated with sports to achieve strategic objectives. These objectives range from promoting national pride and soft power projection to enhancing corporate branding and reputation management. With the increasing commercialization of sports and the growing influence of social media, the potential for sport washing to shape narratives and perceptions has expanded significantly.
One prominent aspect of sport washing involves investment in sports entities, such as acquiring ownership stakes in professional teams or sponsoring major events. Sports offer investors a unique opportunity to gain exposure to a global audience and align themselves with popular and beloved institutions.
Since 2021 Saudi Arabia has spent at least $6.3bn in sports deals. The investments span individual athlete endorsements, Formula 1 teams, Soccer Clubs, and the outright dismantling of the PGA tour - to name a few.
Something else has been happening in recent years - the changes in NCAA regulations allowing college athletes to profit from their personal brand. While long overdue for the athletes, this opens the door for various stakeholders, including corporations and foreign entities, to enter the fray.
If ‘sport washing’ is your vessel for investment, then objectively speaking, a College athlete or program could be like buying shares of a company before it goes public.
During the 2023 College Football Season Alabama’s Crimson Tide averaged over 7 million viewers per game. Bowl games? 25+ million. Sure, that pales in comparison to the 600+ million households across the world watching a premier league soccer match, but the Kingdom has significant investments in Formula 1 - who’s average viewership is right around 1 million a race. PGA tour - another massive investment for Saudi Arabia ~2 million viewers.
Some would argue the investments are already happening, albeit on much smaller scale. The top 10 NIL valuations range in sport from Gymanstics to Basketball, Men to Women, Freshman to Seniors - all worth millions of dollars. Bronny James, son of Basketball Superstar LeBron James, earns roughly $6 million dollars a year as a Freshman at USC from his NIL deals.
Want to secure the next big professional athlete? Why wait, invest in them now. See the potential in a promising college institution or field of study? Why not invest in the school itself?
Put simply, Saudi Arabia's riches are transforming the sporting landscape with a profound and controversial shift in influence. The move upstream, towards College Athletics, seams inevitable.
MARKET SIGNALS:
01 College creep
As highlighted above - student-athletes now have the opportunity to monetize their talents and leverage their popularity for financial gains. It is only a matter of time until the scope of this investment opportunity is realized by significant players.
02 Transfer of wealth
Contributors will continue to be rewarded for their contributions. This is the future economy, and the shift in economic balance. Schools and Students will push and pull on these boundaries for the foreseeable future.
03 College as destination
If the platform to make money is no longer reserved for the professional stage, student athletes may start pursuing College as a destination for financial reward over an educational one (or both). Curious to see which Colleges would position themselves for this opportunity and how. Not to mention the opportunity for them to remain in college longer as opposed to going pro.
04 Digital rise
Frictionless cross-boarder payments and young, tech-savvy contributors. This space is ripe for digital currency plays and innovation.
05 Institutional competition
An influx of investment capital into college sports could exacerbate existing inequalities within the NCAA system. Wealthy programs and institutions may have a competitive edge in attracting top talent through NIL deals, further widening the gap between powerhouse programs and smaller schools.