Why hasn't there been a new major sports league?
14 days ago
- #sports-leagues
- #venture-capital
- #market-structure
- No new major US sports leagues have been founded since 2000, despite over 65 well-funded attempts.
- Existing leagues benefit from legal monopolies, TV contracts, and network effects that create high barriers to entry.
- TV contracts generate 50-70% of revenue for major leagues, making it hard for new leagues to compete without proven viewership.
- New leagues struggle to attract top talent without matching salaries, which requires significant upfront investment.
- Venture capital is ill-suited for sports leagues due to high capital requirements and long time horizons for profitability.
- Billionaires prefer buying existing teams over starting new leagues due to status and financial incentives.
- Younger billionaires, often from tech, are less interested in sports and more focused on other ventures like space travel or biomedical research.
- Sports leagues face competition from niche internet content, which offers more personalized entertainment options.
- E-sports leagues, once seen as the future, struggle with profitability as top streamers earn more than top players.
- Strategies for starting a new league include aligning with non-financial investors, focusing on small team sizes, and targeting individual sports.