SURJ Sports Investment chief executive Danny Townsend has a unique way of describing investing in sport.

“I think sports assets are strange things,” he told the audience during SportsPro Live at London’s Kia Oval in April.

Townsend’s perspective is shaped in part by his time as chief executive of Sydney FC from 2017 to 2020, a period during which the Australian club won three A-League titles.

“I sat down with my board after we’d won the league and they said, ‘what do you think of the club?’, continues Townsend. “I said, ‘as a business or as a football club? They said, ‘what’s the difference?’

“It’s a big difference. I said if it was a business I’d [have] shut it down five years ago. It’s a shit business. But as a club, it’s amazing.

“The reality is that you can’t put a price on that amazing part of it.”

Now heading one of the most high-profile and well-financed sports investment companies in the world, Townsend is uniquely placed to offer insight into where the money in sport is going and why. Indeed, SURJ is part of an ever-growing group of investment firms striking deals of all shapes and sizes that are reshaping the global sports landscape.

Townsend was speaking on stage alongside Raine Group partner and head of EMEA Jason Schretter and Neom’s commercial director of sport Nathan Homer. The panel tackled a range of topics, including the strategies behind sports investments, what investors are really looking for, and whether the value of the sports industry will continue to rise.

Below, SportsPro picks out some of the major talking points from the session.

Townsend, Schretter and Homer all spoke about a range of sports investment topics at SportsPro Live (Image credit: SportsPro)

Premier League clubs need “efficiency gains”

The Raine Group handled the high-profile UK£4.25 billion (US$5.78 billion) sale of Chelsea to a Todd Boehly-led consortium in 2022, before being hired by the Glazers to oversee a sales process that culminated in Sir Jim Ratcliffe’s Ineos acquiring a 25 per cent stake in Manchester United for US$1.65 billion in 2024.

A look at Forbes’ latest ranking of the world’s most valuable soccer clubs has eight Premier League teams in the top 20, with Real Madrid ahead of United in top spot, while a study from Deloitte found that clubs in England’s top flight reported record aggregate revenue of UK£6.3 billion (US$8.6 billion) for 2023/24.

Despite that, only six Premier League sides avoided a loss in the 2023/24 campaign, with United seeing their post-tax losses widen to UK£113.2 million (US$154.1 million).

It begs the question of whether the true value of Premier League clubs has been overinflated, not to mention whether teams can be consistently profitable without factoring in player trading.

“I disagree with the view that there is no path to profitability,” said Schretter. “Several [clubs] are profitable. You need to manage them properly. I think there’s a lot of Premier League clubs that are poorly managed that could use some efficiency gains, a DOGE (Department of Government Efficiency) team to come in and do some fixing.

“What are bigger brands in the world than those teams that are worth billions and what are those other brands worth in parallel? These are archetypes of the culture.

“I think over the course of the next five, ten years, you’re going to see a lot more that these [teams] can do.”

“Sport is worth the pain”

When SURJ was first formed by Saudi Arabia’s Public Investment Fund (PIF) in August 2023, many in the industry anticipated that it would result in an instant flurry of deal-making. However, its purchase of a minority stake in the Professional Fighters League (PFL) remained its most prominent investment for 2023 and 2024.

This year, however, is turning into busy one for SURJ, which has acquired a minority stake in sports streaming service DAZN in a deal reportedly valued at US$1 billion and invested in the upstart seven-a-side Kings League soccer competition. The company also partnered with US-based Enfield Investment Partners in January to identify new sports investment opportunities.

The firm launched – initially as SRJ Sports Investments – with the primary goal of accelerating the growth of the sports sector in the Saudi Arabia and wider Middle East and North Africa (MENA) region. Among its focuses have been creating new sports events IP, acquiring commercial rights of existing competitions and hosting major global events in Saudi Arabia.

Nearly two years on from SURJ’s launch, Townsend noted that the company’s strategy hasn’t changed, but it has learned that the types of deals it is seeking do take longer than anticipated.

“I wish they were easier,” he said.

“As we’re investing in leagues and tours and series, you’re typically dealing with governance structures that aren’t designed to take on capital for one. Two, they’re stakeholder heavy. There’s lots of people that you need to corral into being a part of the change that’s required.

“Our view on the sports landscape is that we look at foundationally strong sports that maybe have some product apathy, that need to change and adapt to [the] modern consumer environment.

“Quite often, those sports can’t identify that they need to change and, therefore, you’re somewhat telling them their baby’s ugly, which doesn’t start well.

“But, ultimately, it gets them to a point where they realise that they do need to change and then how they change becomes the next phase, which takes time.”

Townsend added that the complexity of the investments SURJ is targeting means the company has been working on “three or four deals” since he began his role. He believes the wait and effort will be worth it.

“What gives you comfort is that if you pull those deals off, they’re transformational deals for that sport,” Townsend continued. “They’re not a component part of the sport. They are the sport themselves. I think that as an investment in time will pay back.

“There’s a lot of other institutional investors that probably don’t have that patience because they’re used to dealing in sectors where if you want to go buy a tech company, you just buy a tech company.

“Sport is painful. But I think it’s worth the pain.”

SURJ has partnered with the Kings League to form the Kings League MENA joint venture (Image credit: SURJ Sports Investment/Kings League)

How Neom is using sponsorship to “get in the room”

The numbers associated with Saudi Arabia’s new Neom region since the project launched in 2017 have been eyewatering.

Spanning more than 10,000 square miles and with costs reportedly exceeding US$8.8 trillion, the Gulf state has claimed Neom will create close to 500,000 jobs and add around US$48 billion to the country’s GDP.

Sport is a key component of the mega smart city. While Neom is set to be the surprise host of the 2029 Asian Winter Games, the project is still incomplete. As a result, staging major sports events has taken a backseat for now, with the focus shifting towards using sponsorship to build relationships and generate awareness of the project.

This has led Neom to strike partnerships with McLaren Racing, the Asian Football Confederation (AFC) and the Indian Premier League’s (IPL) Rajasthan Royals. According to Homer, all three are involved in sports that are strategic priorities for Saudi Arabia. And while these agreements provide brand awareness for Neom, they are also very much a B2B play.

“We use football, cricket and motorsport to try and get in the room with the people we want to talk to around the world in various cities, both for the broader company and also specifically for sport,” Homer explained.

“We do use the partnerships for slightly different things than a traditional partnership.”

Homer adds that Neom looks at “the share of wallet” differently, including how it monetises specific sports as a whole and attracts the right investors.

“Adventure sports is a very obvious thing for Neom,” said Homer. “That’s a US$200 billion global tourist business. How do we get our share of that wallet?

“We’re probably looking at a totally different part of that fan or that engaged person in sport and saying, ‘OK, how do we best monetise that?’, and ‘who are the right types of investors to come and help us build in adventure sport?’

“We think there’s an opportunity to do something new and different and take a big slice that for us will be new growth and new value”.

Neom uses its partnership with the IPL’s Rajasthan Royals to build relationships and raise awareness of the project (Image credit: Getty Images)

‘Those that manage change will succeed’

With sports team valuations soaring, particularly in the US, the trio also addressed whether the value of sports will continue to rise or if stagnation is inevitable.

Tier one rights holders, such as the National Football League (NFL), National Basketball Association (NBA) and Premier League, have all secured increases in their latest broadcast deals. Yet not every property has enjoyed the same stability, with a recent example being the uncertainty around Ligue 1’s domestic broadcast deal from 2025/26.

According to Schretter, sophisticated investors will be mindful that the value of broadcast deals “will not go up” for every sport. Even so, that doesn’t mean the properties affected aren’t an attractive opportunity – provided they can diversify.

“One of the ways you change it is by diversifying your interest geographically, so going and finding audiences or creating events and products that can work in different time zones,” Schretter said.

“But I think there’s a ‘then what?’ And I go back to this social network that is more powerful than Facebook, Instagram and TikTok, which is if you are a fan of a team, you are brothers and sisters with your fellow fans.

“So what do you do with that as a concept to create further engagement, which then allows you to monetise?

“I think the most sophisticated of the sports investors are now thinking about that.”

Homer, meanwhile, thinks that “mid-tier” sports are facing “a real challenge” to keep driving new revenue streams. To achieve that, he believes they need to “become a social event” that incorporates mass participation and engagement extending beyond the sporting action.

“It amazes me how few sports franchises that have unbelievable loyalty and love actually use that in a much broader way to drive more revenue for them,” Homer added.

Townsend predicted continued growth for top-tier sports but anticipates broader changes in the years ahead.

“Those that manage that change well will succeed and those that don’t you might find slip away,” he said.

“You look at passion purchases driving price up. There’s been some examples recently in some of the clubs that I think are trading at ridiculous multiples that I don’t think is sustainable. If I’d bought those, I’d be worried.

“But, in the most part, the future is bright for sport.”

Jason Schretter, Partner and Head of EMEA at Raine Group, will be speaking on-stage at the inaugural SportsPro Investment Summit on 9th July at Convene 22 Bishopsgate in London. To find out how you can join hundreds of industry leaders at the event, click here.