Sixth Street pledges $125 million to purchase new women's football team in the US

In committing $125 million to the purchase of a new National Women's Soccer League team, Sixth Street Partners will be the first institutional investor to own a majority ownership stake in a professional American sports franchise.

The agreement highlights private capital's thrust into sports management. The total investment includes a record $53 million league expansion fee, which is what it costs to add a club to the league that is owned by everyone. From expansion fees paid in 2020, that is a ten-fold increase.

Private finance organisations have a history of owning sports clubs in Europe and Asia, but until 2019, Major League Baseball was the only league to change its ownership statutes to permit it.

In response to rapidly growing club values, more lucrative broadcast rights deals, and the start of the coronavirus epidemic, many other American leagues have soon followed suit, but private financing has mostly been restricted to passive minority investors.

The NWSL commissioner, Jessica Berman, stated that the league was "glad to pioneer this for domestic leagues in the US, because we think this is probably we are confronting challenges that other leagues are grappling with."

Sixth Street's chief executive, Alan Waxman, stated that the company was investing with the intention of owning the franchise for at least 10 years. The league is catching up to its male counterpart, Major League Soccer, which started play in 1996 despite only being founded in 2012.

"We estimate that it will take the NWSL ten years to catch up to the MLS in every category. It includes team values, media income, and sponsorships”, according to Alan. Sixth Street, a yet-unnamed club with a San Francisco Bay Area base, will buy a NWSL franchise, making them the league's fourteenth team.

Former Meta CEO Sheryl Sandberg, former Golden State Warriors and NBA executive Rick Welts, and four former US women's national team players with links to the area—Brandi Chastain, Leslie Osborne, Danielle Slaton, and Aly Wagner—are additional minority investors and board members for the squad.

Alan Waxman, a resident of the Bay Area, claimed that when his wife persuaded him to meet the four former players who had been spearheading the push to bring a club there, he was enticed to the idea. Sixth Street is a long-term investor in the NBA's San Antonio Spurs, Real Madrid, FC Barcelona, and other teams. An important period for the league will be marked by the creation of the NWSL franchise, which will commence competition in the 2024 season.

Since 2021, the NWSL has been dealing with a controversy involving systematic abuse that resulted in the resignation or termination of multiple club coaches, the removal of the former commissioner Lisa Baird, and the forced sales of the Chicago Red Stars and Portland Thorns, two current teams. The league is currently looking into potential purchasers for those two teams.

“We're not looking for the historical women's sports investor who came for a social cause or because they had a grandchild or daughter involved”, Jessica said. "This is a company. We anticipate that affluent individuals will want to invest, believe in the value offer, and use all the trends that Sixth Street has discussed as justification for the valuation of their investment.”