Angel City Football Club is benefiting from what local attorneys are calling a “surge” of investments and increased valuations in women’s sports.

“Since 2020, expansion fees for the National Women’s Soccer League teams jumped from $2 million to what we’re hearing is $50 million for the latest rounds,” said Luisa Lizoain, a managing associate with law firm Sidley Austin LLP. Expansion fees are essentially the price of admission for new teams to join the league.

Lizoain, who works with Sidley Austin’s media, sports and entertainment team, represents organizations such as Angel City on matters including equity financing and sponsorship and commercial deals.

Angel City began play in the league last year and is owned by actress Natalie Portman, local venture capitalist Kara Nortman and entrepreneur Julie Uhrman.

Lizoain works with Eric Geffner, a partner at Sidley Austin who has represented various business entities on investments in, and acquisitions of, major professional sports and esports teams in the United States and abroad.

Geffner noted that teams from Utah and San Francisco are likely to join the league next year in addition to a Boston team that may be integrated at a later time.

“The reported expansion fees for the Boston (and) Bay Area (teams) were $50 million, which is basically 25 times what it was reported to be for Angel City,” Geffner said.

The National Women’s Soccer league consists of 12 teams and kicked off its 2023 season near the end of March.

Angel City had a sold-out crowd of 22,000 in its home opener against Gotham FC, which was played at BMO Stadium in Exposition Park. According to Soccer Stadium Digest, Angel City had the highest average attendance last year, 19,105.

The increase in fees is indicative of rising interest from consumers, investors and media companies in women’s sports, Geffner and Lizoain said.

“We’re seeing celebrities, former athletes, and high-profile investors that are (focused on) missions in a way that really distinguishes them from traditional sports investors,” Geffner said. “Yes, these impact investors are supporting gender equality, social justice, their communities, and they’re conveying a message, but these folks are also still really focused on return of investment. I think they see real opportunity in what historically has been and really continues to be an undervalued asset (in women’s sports).”

He added that another factor driving interest in women’s sports such as soccer is the increasing valuations of men’s teams, which has made it more difficult for investors to engage teams and simultaneously drawn attention to how undervalued women’s teams have historically been.

For example, compared to Angel City’s $2 million expansion fee, Major League Soccer team Austin FC joined the men’s league in 2021 after paying a $150 million expansion fee.

Soccer and more

Soccer is just one part of the puzzle for women’s sports, which has garnered attention from the likes of financial services firm Ally and The Walt Disney Co. The two companies announced in February a deal that will dedicate 90% of the partnership’s investment toward women’s sports coverage on ESPN channels. The multimillion-dollar deal will run for an undisclosed number of years.

Now, as noted by Geffner and Lizoain, investors are stepping up to the plate to further engage the women’s sports market.

Nortman is one such investor. In addition to co-founding Angel City, she has invested significantly in women-led companies through her former managing partner position with Santa Monica-based Upfront Ventures, one of the largest VC firms in Los Angeles. More than half of the companies in her portfolio at the firm were led by women.

Most notably, Nortman announced last month the launch of Monarch Collective, a $100 million investment fund based in Los Angeles focused on investing in women’s sports. Nortman launched the fund alongside venture capitalist Jasmine Robinson.

In a virtual panel last week hosted by Angel City and founding partner PNC Bank, Nortman said she has seen more viewership and money being put into women’s sports not only in the United States, but internationally as well. She highlighted activity in countries such as England, India and New Zealand, the latter of which recently had a women’s rugby team sell out a stadium and post better television ratings than its men’s league counterparts.

“Going out as a woman in this industry in the middle of a banking crisis to do something I believe in was profoundly special,” Nortman said. “I think the fact that that we got this done right now speaks to the success of Angel City, but also these trends we’re seeing around the world.”

The virtual panel also featured Todd Wilson, PNC’s regional president for Greater Los Angeles. Wilson and his bank have been working tightly with Angel City FC following a sponsorship announced in late February that made the bank a founding partner and introduced programs and initiatives directed toward women financial decision makers.

Reallocation of 10% of the bank’s sponsorship investment will go into a fund established with Angel City to provide grants to support retired National Women’s Soccer League players who aspire to build or grow social enterprises and businesses.

Wilson did not disclose the amount of the investment in Angel City in a follow-up with the Business Journal. However, he did share that PNC provided gap funding to get the program started.

The bank is also engaging the team through financial education workshops.

“PNC is providing Angel City FC’s front-office staff and players with financial education workshops about financial literacy and money management concepts through PNC’s Organizational Financial Wellness Program,” Wilson said.

Geffner and Lizoain worked with Angel City on the PNP sponsorship.

Regulation changes

Lizoain stressed that changes in regulations concerning institutional investors has led to increased funding in the women’s sports sector.

“Over the past few years, all of the major professional sports leagues in the U.S. other than the NFL have begun to permit institutional investment,” she said. “We’ve seen a surge of private equity players in the sports investment and acquisition space. Some of those are traditional private equity funds and some of them are sports-specific.”

Lizoain referred to Nortman and Robinson’s Monarch Collective as an example. “Institutional investments have contributed to the higher valuations (of teams) and owners are looking for more access to capital, which these private equity investors can provide,” she said.

Geffner added that he and his team do not see the current moment in women’s sports as a blip, but instead consider it the beginning of a larger investing movement.

“I think you’re seeing a domino effect,” he said. “You’re seeing the fans and the community showing up, larger sponsors and commercial dollars, and that’s going to lead to more on the revenue front.”