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Private equity and venture capital funds looking for the next big thing in sport have turned to one of the most popular summer Olympic events: volleyball.
A new women’s league in the US backed by investors including Ares Management and Blackstone executive David Blitzer, whose sports investments span basketball, baseball and football, was due to make its debut in a 3,500 capacity arena in Atlanta on Wednesday.
League One Volleyball co-founder Katlyn Gao said the venture would create the “NBA of volleyball” and break the cycle of top US players moving to more established leagues in Europe or Asia. It would also seek to tap a “huge addressable market” of amateur players and fans.
“The entire ecosystem has been underserved and under-commercialised and we’re building essentially the premier brand in the sport,” said Gao, a former executive at sportswear maker Lululemon.
LOVB — pronounced “love” — was set up in 2020 as a network of clubs for girls and young women looking to play the sport that would eventually provide a talent production line for its planned professional league.
It now has 1,500 junior teams playing at 58 clubs nationwide, operating a similar business model to a network of gyms with customers paying membership fees, which can run into thousands of dollars a year.
The company secured $100mn in November through a funding round led by Atwater Capital, a private equity firm focused on media and entertainment. Existing investors including Ares and Left Lane Capital, a New York-based VC-firm, also took part in the C-series fundraising. The sale of LOVB’s six team franchises is likely to be the next step.
LOVB is not the only volleyball project to lure global capital. In early 2021, CVC Capital Partners invested in Volleyball World, a joint venture with governing body FIVB, at a $300mn valuation to exploit what the firm called a “huge untapped fan base and commercial potential”.
Since joining Volleyball World from Canadian entertainment company Cirque du Soleil in 2021, chief executive Finn Taylor has focused on streamlining the global calendar to create “tent pole events” that can attract long-term sponsorship and broadcast deals. Growth in the US is a key priority, especially ahead of the Los Angeles Olympics in 2028.
“One of the challenges the US market always had was that the athletes would be superstars in college, but to become professional they would have to leave to play in Japan or China or Italy or somewhere else,” said Taylor. “Now what we’re able to do is have these superstars playing at home.”
Those investing in volleyball point to a pool of fans around the world, with figures compiled by consultants at OC&C for CVC showing an estimated global audience of 800mn for indoor volleyball, with large followings in China and Brazil. About 700mn people play the game regularly.
In the US, volleyball ranks second only to track and field in terms of female participation, and broke the attendance record for a women’s sporting event in 2023, when 92,000 people watched a college game in Lincoln, Nebraska.
Kort Schnabel, co-head of sports, media and entertainment at Ares, said the firm sees “significant growth opportunities” for LOVB. Its strategy of building a youth and amateur volleyball business before launching a professional league provided “both diversification as well as an installed channel for growing and reinforcing its fan base and engagement”, he added.
Jason Fiedler, managing partner at Left Lane Capital and a board member at LOVB, said the investment in volleyball had become one of the “stars” in the firm’s portfolio, with the amateur club business performing “incredibly well”.
“What can drive a very large outcome for us is if we can — on top of those clubs — build this professional entity that can then drive significant media rights,” he added.
The rapid growth of women’s sport has caught the eye of an increasingly diverse group of investors. In July last year, Disney chief executive Bob Iger and his wife Willow Bay took a controlling stake in the US women’s football team Angel City at a valuation of $250mn, a record for a women’s sports team.
Oakwell Sports Advisory estimates that audiences for women’s sport have grown by about 40 per cent a year since 2021, although it warned that many competitions are struggling to attract significant broadcast income.
It said LOVB faced the challenge of competing with two existing volleyball leagues in the US while paying high enough salaries to keep players from joining more established competitions in Europe and Asia.
LOVB joins a wave of new sports competitions backed by both institutional capital and celebrities looking to reach younger viewers.
Tiger Woods and Rory McIlroy this week launched TGL, a new golf league played largely on a simulator, whose backers include hedge fund manager Steve Cohen and Reddit co-founder Alexis Ohanian.
This month also marks the return of a padel tournament backed by the Daily Mail’s VC arm and a power boat series bankrolled by Saudi Arabia’s Public Investment Fund. Both debuted last year and count famous sports stars and Hollywood actors among their list of team owners.
