Venture capitalist Chamath Palihapitiya made a huge bank after selling his Golden State Warriors stake in 2023. After investing $25 million for a 10% stake in 2011, the businessman hauled in $225 million. These 10x returns imply the blooming sports market and also highlight the market ascension of the Golden State Warriors. In his interview with sports business enthusiast Joe Pompliano, Palihapitiya touched upon how 2024 will be even bigger for sports ownership.
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“I am going to say that 24[2024] is the peak in terms of valuation of professional sports,” predicted the former Warriors minority owner.
The investor gave three examples from last year that were the harbinger of this year’s immense sports bloom. These examples showcased the influence that the state of Saudi Arabia played in global sports. Therefore, the venture capitalist pointed out the role of the Saudi-government-backed Public Investment Fund (PIF) in shaping the market for both golf and football.
The controversial LIV Tour forced PGA to merge with it after the latter had been discredited earlier. Meanwhile, the PIF also lured soccer heavyweights Cristiano Ronaldo and Neymar to change the landscape of the most popular game. In these cases, the Saudi Arabian leagues used the power of money to lure players. Therefore, Paliphitiya rightly pointed out that the Saudi Arabian government is using capital to transform the picture of sports. Then he pointed out how a huge precedent in the USA.
He highlighted how NCAA athletes are signing NIL (Name Image Likeness) deals before even turning professional. This has helped them earn millions and even outearn many professional athletes. 2023 NCAA women’s basketball winner Angel Reese is a prime example of signing an NIL deal with multiple brands. She has already massively out-earned most WNBA players. The businessman then pointed out two major reasons for these trends.
“There has been a tipping point in enterprise values. The acceleration we’ve seen during the last has slowed down. I’d say that 2024 is gonna be the year of peak pro-sports,” opined Chamath Palihapitiya.
If we apply his prediction to the NBA, then his words gain more steam. The NBA can see radical business transformation in a short span.
Will the NBA see a business revolution?
In the context of blossoming business, the NBA’s next media rights deal after the 2024-25 season can be a decisive player. Since live streaming has replaced traditional cable TV, these media deals are bound to bring widespread changes. Therefore, television giant Disney, which owns ESPN, can lag behind more popular streaming platforms.
This can bring Amazon and Apple to the forefront. However, Disney’s expansion of streaming services still pitches them as a competitor for the next NBA media deal. Amazon has emerged as a lucrative contender after its humungous success with the NFL’s Thursday Night Football.
With such business giants in play for the next deal, as per Forbes, the NBA administration expects a fee of $8 billion, an uptick from their current $2.4 billion contract. Through the advent of AI (Artificial Intelligence), the post-2024-25 media rights owner/owners can deploy multiple tools and change the way we view the game too. As per Los Angeles Clippers owner Steve Ballmer, fans will find “weird ways” to interact with the game.
He also relayed that his ambitious desire to view the game from a player’s lens will also become a reality soon. Appearing on Podcast P with Paul George, the former CEO of Microsoft expressed, “There’s one I am real excited about. I say to myself, I wanna just watch this game from PG’s[Paul George] perspective. Okay? I wanna see what he sees.”
Will Ballmer’s wishes be fulfilled within a couple of years?
