In Kara Nortman’s experience as a venture capitalist, she knows people can always find lots of reasons why an investment can’t work. “We’re always hearing skeptics,” she said. “We need to see enough to believe it can be big—a multi-hundred million-dollar or billion-dollar opportunity.”
A long-time VC who has led early investments into companies, including Ring (sold to Amazon for more than $1 billion), Nortman sees enough in women’s soccer to bring together a coalition of nearly two dozen celebrities, media executives and soccer veterans to fund a National Women’s Soccer League franchise in Los Angeles.
A long-time soccer fan—she recounts with frustration having to search far and wide for U.S. Women’s National Team jerseys at the 2015 Women’s World Cup site in Vancouver—Nortman didn’t consider investing in sports until actress Natalie Portman, a friend from activist efforts, suggested they buy a team last year. Then, Nortman’s mind immediately shifted to business mode: “Is there enough I can see in existing model and proof points in the market that it can work where we’re at today and, if one or two things start to evolve, that it can really work?”
In women’s soccer there’s plenty: The 2019 women’s World Cup final between the U.S. and Netherlands scored 22% better American viewership than the 2018 men’s final featuring France and Croatia. CBS All Access is streaming matches of the NWSL Challenge Cup this summer, marking the first time NWSL games can be reliably seen on a major provider. And fan attendance at NWSL games rose more than 20% last season.
Such signposts suggest there is a lot of unrealized growth, some of it potentially explosive, even as the NWSL folded franchises in Kansas City and Boston two years ago because of ownership troubles. To Nortman, women’s soccer is best viewed through a VC lens, rather than traditional sports valuations, which use detailed past-performance data to project into the future. The initial funding for L.A.’s yet-to-be named NWSL squad came through a Series A round, which is populated by soccer lovers turned investors, including America Ferrara and Jennifer Garner, soccer stars Mia Hamm and Abby Wambach and entertainment executives like Brian Weinstein of Bad Robot.
Later rounds for new investors are planned at higher valuations. “Like a venture startup, you wouldn’t raise money all at once if you believe that you’re creating value each week and with each milestone,” Nortman said.
Citing a non-disclosure agreement with the league, Nortman declined to discuss specifics of financials or identify performance goals. Regardless, investing in a pro team is sizable, even in a developing league like the NWSL. The expansion fee for the Louisville franchise, set to debut next year, was said to be $1 million (a NWSL spokesperson didn’t return a call seeking comment). Fielding a team annually costs at least that much, with a team’s player salary cap reaching $650,000 this season, plus hundreds of thousands more in spending allowed to exceed the cap, in some cases. Then add in non-player personnel salaries, travel costs and paying for your home field, and money demands are sizable.
While the quality of play is vitally important, Nortman’s calculus for making a women’s soccer team pay off extends well beyond the pitch. The team is working with LA84, a non-profit that funds children’s sports in southern California, to extend opportunities for kids, who would later be fans, and she’s making sure there will be plenty of fan gear available. Most importantly, media rights should rise in value as networks, streaming services and social networks compete for compelling new content. “There are more opportunities to monetize a passionate base more than ever,” adds Nortman.
Like any good venture capitalist, Nortman prefers to be in the game early, rather than late. “Six months after you fund them the world realizes, ‘Oh my gosh, I missed that.’”