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The First Professional Sports ETF
I'm excited to announce that I've partnered with Roundhill Investments, and we are launching MVP, the first ETF that will allow you to invest in professional sports teams and leagues.
Every morning I write an email breaking down the business and money behind sports. If you would like to receive it directly in your inbox, sign up now.
It’s no secret that the COVID-19 pandemic financially decimated professional sports leagues and individual teams globally, which resulted in billions of dollars of lost revenue.
The bright side?
As the COVID-19 vaccine is distributed, life returns to “normal,” and fans begin to fill arenas and stadiums worldwide, I expect the financial health of professional sports to improve quickly.
That’s why today, I have an exciting announcement to make:
I’ve partnered with my friends at Roundhill Investments, and we are excited to launch MVP — the first Exchange Traded Fund (ETF) that will allow you to invest in professional sports teams and leagues.
MVP will include professional sports franchises like the New York Knicks, New York Rangers, Manchester United, Juventus, and more, as well as publicly-traded leagues like Formula One and World Wrestling Entertainment (WWE). The fund will also allocate capital to sports media and apparel brands, among other sports industry sectors.
With that in mind, the real question becomes — why?
Let’s run through my thought process.
While it’s true that the COVID-19 pandemic has negatively impacted the financial health of professional sports leagues and teams, I believe numerous factors propel sports forward as life returns to “normal.”
Here are four examples:
Global Market Size
Sustained Value Appreciation
Increasing Media Rights
Developed Sports Betting Market
Let’s start with the global sports market size.
According to NPD Group, the global sports market will be worth $626 billion by 2023 — up 33% from the $471 billion tracked in 2018.
Even more impressive?
That includes the contractionary period we saw in 2020 due to COVID-19.
Similar to how the sports market has continuously increased in size, the valuation of individual sports franchises has followed suit.
From 2011 to 2020, the average franchise across the NFL, NBA, NHL, MLB, and Premier League increased in value by over 500%.
Simply put, professional sports franchises have a strong history of value appreciation.
That’s a trend I believe will continue.
In addition to growing market size and a history of franchise value appreciation, the sports landscape is currently experiencing multiple macro-related tailwinds that I believe will help grow the industry for years to come.
For example, estimates from Rethink Research suggest the rise in streaming will drive global revenue from sports media rights to $85 billion by 2025 — a 75% increase compared to 2018.
That’s not all…
Only 27% of the US population currently has access to legal mobile sports betting in their state, which Macquaries believes will move all the way to 96% by 2025.
As legal sports betting continues to be legalized across the country, new revenue opportunities for professional sports teams and leagues will become available.
In the end, I’m excited about the launch of MVP for one simple reason:
Professional sports leagues and teams have a history of being premium, scarce assets with a strong history of value appreciation. With MVP, we have created a unique and efficient vehicle for you to adequately invest and diversify into the sector.
Keep an eye out for more detailed breakdowns of holding companies in the future, but until then, don’t forget, everyone can be an owner with MVP.
Have a great day, and we’ll talk tomorrow.
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If you want to learn more about MVP, you can check out the full investor presentation here. MVP is now trading on the NYSE, and you can buy via your retail brokerage platform. For a full list of holdings, please click here.
Forecasts are inherently limited and should not be relied upon when making investment decisions.
Forecasts are not guaranteed.
In addition, they do not guarantee the favorable performance of the underlying securities in the applicable sector, nor does it guarantee the favorable fund performance.
Investing involves risk, including possible loss of principal. Professional Sports, Media, and Apparel Company Risks.
Professional sports teams and leagues are dependent upon the performance and/or popularity of their franchises and compete, in varying respects and degrees, with other sporting events. In addition, professional sports teams are largely dependent on their ability to attract strong attendance to their professional sports franchises’ home games and compete, in certain respects and to varying degrees, with other leisure time activities and entertainment. Economic downturns and other adverse conditions, including the current economic downturn and conditions caused by the ongoing COVID 19 pandemic, such as suspension of sports events or limitations on in-person attendance at such events, can negatively affect their operations. Professional sports companies are also dependent upon their ability to develop, obtain and retain talented players, as well as the on-field success of their teams, and injuries to players also pose a risk. SPACs Investment Risk.
The success s of Apparel companies depends heavily on disposable household income and consumer spending and changes in demographics and consumer preferences. Market or economic factors impacting Media companies that rely heavily on technological advances are particularly vulnerable to research and development costs, substantial capital requirements, product and services obsolescence, government regulation, and domestic and international competition, including competition from foreign competitors with lower production costs.
The Fund may invest in equity securities of SPACs, which raise assets to seek potential acquisition opportunities. SPACs have no operating history or ongoing business other than seeking acquisitions. Their value is largely dependent on the identification and completion of profitable acquisitions, of which there is no guarantee.
Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about Roundhill ETFs, please call 1-855-561-5728 or visit the website at www.roundhillinvestments.com/etf/. Read the prospectus or summary prospectus carefully before investing.
Distributor: Foreside Fund Services, LLC.
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