Morgan Lewis launches its sports industry initiative and welcomes Jeffrey Moorad, a former team owner and executive, to the firm.
The vast and complex sports industry—with participants including professional and collegiate sports teams and leagues, sports venues, advertisers, investors and financiers, and TV and digital broadcasters, as well as manufacturers, distributors, and retailers of sports merchandise, among many others—has witnessed unprecedented growth in recent years. The global sports industry is estimated at a value of more than $600 billion today, while in North America, the sports market is expected to reach $73.5 billion in 2019, up from $60.5 billion three years ago, according to Forbes. Global sports media rights are projected to grow at about 7.2% a year to be in excess of $20 billion by 2019.
Team valuations have enjoyed similar growth. The average Major League Baseball team is worth $1.54 billion today, up 19% from last year, according to Forbes. In Major League Soccer, the average team is now worth $185 million, up a staggering 80% from 2013. In the English Premier League, the average revenue of a single team in the 2015–2016 season exceeded the total revenue generated by all 22 teams that played in the league 25 years ago. Those revenues are expected to climb, thanks in part to a six-year, $1 billion deal that the league signed in 2015 with NBC to broadcast the games in the United States.
“The demand for live content, regardless of its delivery platform, continues to fuel innumerable opportunities in the industry,” said Jeffrey Moorad, who recently joined Morgan Lewis as Chairman of the firm’s global sports industry initiative and a principal of Morgan Lewis Consulting. Jeff, a former owner and CEO of the Arizona Diamondbacks and the San Diego Padres and the current chairman and CEO of the investment management company Moorad Sports Partners, has also been a longtime Morgan Lewis client.
Besides the growing franchise valuations and interest in digital content, a major trend in the sports industry is globalization, as American sports leagues seek to extend their reach overseas while leagues in Europe and elsewhere try to connect with audiences in the United States and beyond with mega TV deals, said Morgan Lewis partner John Concannon III, who will co-lead the firm’s sports industry initiative with Jeff.
Jeff and Jack recently discussed these and other trends in the sports industry and how a global firm such as Morgan Lewis is well positioned to assist clients investing and operating in this increasingly global industry.
As a former client and now Chairman of the firm’s global sports industry initiative, what made you choose Morgan Lewis?
Jeff: I’ve always had great respect for the firm, and I have a number of long-term friendships with Morgan Lewis partners. I’ve had an insider’s perspective over the years as a client and have enjoyed watching the firm do the kind of sophisticated work that you would expect from one of the top firms in the world.
In particular, because of my relationship with Firm Chair Jami McKeon, the idea of working with Jack Concannon and the Morgan Lewis partnership to promote and extend the firm’s brand and platform in the sports industry was something that became an intriguing opportunity. At this stage, I’m enjoying the challenge of first, putting our arms around the existing sports business the firm does, and second, beginning the process of building out the platform going forward.
Why should clients in the sports industry choose Morgan Lewis?
Jack: Morgan Lewis has had a long history of representing sports franchises, investors, media companies, and financiers in the sports industry. And with Jeff coming on board, this is a great opportunity to let it be widely known that we are very committed to this industry and that we are putting significant effort and resources into building a world-class industry practice for the firm.
Jeff: As a global law firm, Morgan Lewis has the skills and reach to assist sports industry clients around the world. Our effort is greatly enhanced by a significant amount of work that has been done in the industry over time, which we now are aligning with and highlighting in new ways.
What would you say are the biggest trends in the global sports industry that the firm and its clients should be watching?
Jeff: For years, sports was a cottage industry that had few specialists and lots of generalists that supported it. Today, it’s a mega-billion-dollar global industry that’s powered by the most significant businesses around the world through sponsorships, broadcast rights, and ownership of sports assets. The business has become a stand-alone industry, as opposed to its former status as a subset of the traditional entertainment sector. This transformation has been driven by consumer demand and an insatiable appetite for live sporting events. Along with news, live sports is one of the few platforms that viewers desire to watch and will pay handsomely for. At the core, that’s what feeds everything from media rights, sponsorships, and ticket sales to franchise valuations and player compensation.
What opportunities do you see for clients looking to invest or do business in the sports industry?
Jack: In the last 15 to 20 years, investors have generally made a lot of money in the sports industry. The valuations of franchises are historically very high right now, but it is still a very good time to invest in the industry.
Jeff: As long as fans across the globe are desirous of live content, this industry will thrive. Given the depth and breadth of its practice, I believe Morgan Lewis is in a perfect position to serve clients interested in investing in the industry at any level and in any form.
Outside of professional and collegiate sports competitions, we have global competitions. Tokyo, Paris, and Los Angeles are planning to host the 2020, 2024, and 2028 Summer Olympics, respectively, while Pyeongchang and Beijing are scheduled to host the 2018 and 2022 Winter Olympics, respectively. What kind of opportunities should clients with related businesses be looking for now?
Jeff: The Olympics are an interesting opportunity for countless businesses to be involved with. These global competitions that occur every two years have a tremendous global sports following. Since the Olympics turned a profit for the first time in 1984 in Los Angeles, the modern Olympic movement has become a huge business opportunity. The 1984 Games showed that, with the support of corporate sponsorship, the Olympic Games could be put on by host countries in a positive, profitable manner. These competitions offer opportunities at multiple levels that Morgan Lewis is perfectly positioned to assist with.
American professional leagues are looking to expand their audiences beyond the United States. The English Premier League and other European soccer leagues are also looking to reach audiences in the United States with global broadcast deals. What does this mean for investors, and how can Morgan Lewis help clients in this environment?
Jeff: All of the American and global leagues are looking for ways to expand their reach. Whether it’s with exhibition games or regular season contests being played overseas, they are looking for opportunities to extend their brands to a global platform—which is exactly the platform that Morgan Lewis excels on.
Jack: Whether it’s American leagues looking beyond US borders or the English Premier League signing TV deals, sports has become global. And Morgan Lewis is a global law firm, with 30 offices* in 11 countries—that positions us well to assist clients on a wide range of business and legal needs for what has undeniably become a global industry.*Our Beijing and Shanghai offices operate as representative offices of Morgan, Lewis & Bockius LLP. In Hong Kong, Morgan Lewis operates through Morgan, Lewis & Bockius, which is a separate Hong Kong general partnership registered with The Law Society of Hong Kong as a registered foreign law firm operating in Association with Luk & Partners.