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REGIONS AMERICAS


SPORTS ARE BEGINNING TOWAKEUP. WEARE APPROACHINGAGOLDENAGE OF INVESTMENT IN SPORT


Rugbytackles theUS withastart-up league A


FOREIGN CAPITAL AND PLAYERS HAVE HIGH HOPES FOR NEWSPORTS VENTURES. MALCOLM BEITH REPORTS


New Zealander passes the rugby ball to an Irishman, who passes to another New


Zealander, who scrambles over for the try — giving New York the lead over San Diego, 19–14. Although this sounds like the set up of a joke, it is a recap of the 21st minute of the March


20 opening-day match of the US Major League Rugby (MLR), which is now entering into its third season. Bolton Equities Ltd, the New Zealand-based


private equity firmthatowns RugbyUnionNew York, will no doubt have been pleased with the eventual 36–29 victory.


Trying to find a place Rugby is one of several sports in the US that has become attractive to foreigners — both players and investors. Reliance on foreign players to attract US fans started more than 45 years ago, when the Brazilian football player Pelé joined the New York Cosmos. The league folded in the 1980s, but subsequent endeavours, including Major League Soccer (MLS), have since been dependent on foreign players. Other leagues, such as the National Hockey


League(NHL),theNationalBasketball Association (NBA), Major League Baseball (MLB) and the Premier Lacrosse League (PLL), have experienced an influx of foreign players in recent decades; indeed, 28% of MLB players are nowforeign. This influx has brought much-needed investment in the form of so-called ‘private money’ — most often in the formof private equity, domestic and foreign investment. TheNBAboasts teamowners from Israel, India and Taiwan. The increase in private money has gener-


ated a newfoundacceptance of fundownership. MLS and the NHL now welcome fund invest- ment. Global Rugby Ventures, set up by Errik Andersonwhen he founded the rugby teamthe NewEngland Free Jacks, nowboasts a minority


54


interest in four MLR teams. “Sports are beginningtowake up,” says Giles


Morgan, former global head of sponsorship and events atHSBC. “There’smoreandmoreinterest in privatemoneyin sport.Weare approaching a golden age of investment in sport.”


Finding the right partners MLR and other smaller competitive leagues, such as the PLL, will never replace American football, basketball, baseball, soccer or ice hockey in the US. However, with investment from the likes of Joe Tsai, executive vice presi- dent of Alibaba and owner of teams in the PLL, MSL and NBA, theymay one day be able to share the limelight. And MLR may become a bell- wether of successful foreign investment for other start-up leagues, despite the road ahead going further uphill. “We’re not profitable,” says MLR commis-


sioner George Killebrew, who came to MLR in 2020 with decades of marketing and executive experience at the NBA’s Dallas Mavericks. He took charge of a league that is expanding, despite its struggles, on its own volition. Although Mr Killebrew does not deny that


the cash-strapped league would welcome the $10m required for any new team to enter into the fray, he insists that MLR is not desperate. “We’re not in survival mode anymore. We’re not in dire need. We can sit back and look for the right partners,” he explains. While several sources told fDi that the


teams’ owners hope to grow MLR by one or two teams per year until it becomes a 32-team league, the MLR would not disclose any figures related to its projected expansion. Hosting the Rugby World Cup is another goal that Mr Killebrew is working towards. MLR was founded as a US league that would


hopefully produce American players and one day produce a World Cup-winning team. The limited US talent pool meant that the limit of


www.fDiIntelligence.com April/May 2021


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