A group led by private equity giant Sixth Street has closed on an NWSL expansion team in the San Francisco Bay Area, committing to a league-record $53 million expansion fee.
The group’s investors include former Facebook executive Sheryl Sandberg, former Golden State Warriors president Rick Welts and a quartet of former USWNT players—Brandi Chastain, Aly Wagner, Danielle Slaton and Leslie Osborne. They say they plan to invest $125 million in the team at the start, including the expansion fee, a roughly $40 million practice facility, and the remaining $32 million or so onto the club’s balance sheet.
Sixth Street’s investment thesis, according to co-founder and CEO Alan Waxman, centered around data regarding growing attendance at women’s sports, increased media accessibility, contractually obligated revenue and social media following. The firm has been researching the NWSL opportunity for about nine months, Waxman said in an interview, and found that “everything that indicates something is structurally undervalued was flashing green, on every vector.”
“There’s a bigger structural trend here, where the economics have not yet caught up with reality,” Waxman said in an interview. “The data is just popping off the page.”
Sixth Street will be the franchise’s majority and controlling owner, though Waxman declined to comment on the size of its stake or the valuation that accompanied the other investors. More details, like a team name and home venue, will be announced in the coming months.
The Bay Area team will join the 11-year-old league for the 2024 season alongside the resurrected Utah Royals. The NWSL is also preparing for additional expansion, a process being run by Inner Circle Sports, and is close to a deal with a group based in Boston that will pay the same $53 million fee, according to multiple people familiar with those talks. Both the Bay Area and Boston groups were approved by owners earlier this year prior to the league’s draft in Philadelphia.
This is among the largest investments ever made into professional U.S. women’s sports and comes via a handful of prominent backers. Sixth Street’s sports portfolio includes a majority stake in event and hospitality company Legends, and investments with the San Antonio Spurs, Real Madrid and Barcelona. Sandberg and Welts will serve on the team’s board, as will Staci Slaughter, a former executive with the San Francisco Giants.
The $53 million expansion fee is a steep increase from years past, and also significantly more than the price paid by the Royals owners, who'd previously acquired what was essentially a $2 million call option. The discrepancy is a reflection of the commercial growth of the league over the last two years, which has led to substantial increases in team valuations. The Washington Spirit were valued at $35 million in Michele Kang’s acquisition in early 2022, for example, and Gotham FC raised money a few months later at a roughly $40 million valuation. Angel City, now playing its second NWSL season, has raised money at a valuation north of $100 million.
And there's more growth coming, according to Waxman. He said Sixth Street believes that professional women's soccer in the U.S. could be on par commercially with pro men's soccer in the U.S. within the next decade. That would come through growth, not by taking money from MLS, where expansion fees are more than $300 million and the average franchise is worth $582 million.
"When I say that, I mean advertising, sponsorships, partnerships, and investment dollars, but also the flow-through of that is valuations," Waxman said. "That's not our base case. That's what we think is going to happen."
The Bay Area group was one of the most high-profile bids during the expansion sale process, though Sixth Street’s involvement was much quieter. Unlike many leagues, the NWSL does not currently have firm rules around institutional investors. Waxman will serve on the NWSL’s board of governors; Wagner will serve as the alternate. They will co-chair the board.
The expansion franchise will be the Golden State’s third NWSL club alongside Los Angeles’ Angel City FC and the San Diego Wave, which joined in 2022. With the Utah and Bay Area additions, the league will grow to 14 teams in 2024.
“The number of bids and the increase in the league’s expansion fees are indicative of both the demand that exists for women’s soccer in the professional sports landscape and the validated growth trajectory of our league,” NWSL commissioner Jessica Berman said in a statement.
Roughly 99% of the money spent in sports—advertising, sponsorship, media, investment dollars, etc.—is spent in men's leagues, Waxman said. If that ratio eventually shifts to even 90-10, Sixth Street and its investors will make money, he added.
"In five years," he said, "people are going to be saying, 'Why wasn't this so obvious when it was happening?'"