2024: The Year of Volleyball

Breaking into the mainstream

Introduction

What the year 2020 was for professional Pickleball, the year 2024 will be for professional Volleyball. In 2020, the COVID-19 pandemic forced people to get outside for physical activity, which helped fuel the explosive growth of interest in the sport of Pickleball. The sport has existed since the 1970s but didn't enter the average American's lexicon until 2020. This growing interest in Pickleball at the recreational level led to the creation of multiple professional leagues and increased investor interest. I believe we are at a similar inflection point for Volleyball. Historically, Volleyball has been incredibly popular at the high school, collegiate, and Olympic levels, yet there haven't been broad commercialization efforts or a successful and enduring professional league. That will change this year as two institutionally backed leagues will launch, the Pro Volleyball Federation (PVF) and League One Volleyball (LOVE), which will be joining Athletes Unlimited, which began play in 2021.

I'm confident that the emergence of professional Volleyball will be one of the highlights of 2024 after the year is over when we reflect on the changes to the ever-evolving professional sports landscape. For investment professionals in the sports ecosystem, it is essential to recognize this greenfield opportunity and evaluate entry points into the sport at the league, franchise, and adjacent technology levels.

Growth of Volleyball - A Brief History

Before diving into the sport's future, I want to give background on its origins briefly. William Morgan invented Volleyball in 1895 as an alternative for those who found Basketball too physical. It was a combination of Basketball, Tennis, and Handball, taking elements from all three sports. The game spread rapidly through the global YMCA network, and in 1947, key stakeholders created an official international governing body to help manage the sport for future generations. Indoor Volleyball was granted Olympic status in 1957 and debuted at the Tokyo Games in 1964 (Beach Volleyball would take longer to gain Olympic acceptance and debuted at the 1996 Atlanta Games).

Since its creation, Volleyball has had a strong presence at the high school and collegiate levels that has only escalated in the past decade. According to the National Federation of State High School Association, it's the second most popular sport for high school girls (behind Track and Field). Female participation has increased by 15% since 2022 (male participation has grown by 40% since 2017, although starting with a smaller denominator). This past year, USA Volleyball experienced its most considerable membership growth since 1998, with a 9.6% increase in membership or 408,000 additional members.

Beyond the high school level, the collegiate game has never been in a stronger position regarding the caliber of competition and consumer interest. In August of 2023, the Nebraska Cornhuskers set an attendance record for any women's sporting event, with 93,003 fans attending a game held at the Lincoln Memorial Stadium. In this past year's national championship, the University of Texas won its second successive title in front of 20,000+ in attendance after playing in front of 19,000+ in the semi-final match.

It's not just the in-person attendance numbers that reflect the growing interest in the sport. There is a justifiable demand for media coverage rights as well. Volleyball is the third most watched sport on the Big Ten Network after Men's Football and Men's Basketball. 1.1M viewers tuned into ESPN for the 2023 semi-final games, and 1.69M viewers tuned into ABC for the Championship match. These viewership numbers represent a 49% increase from last year's event.

The climbing participation rates at the high school level, the increasing media interest at the collegiate level, and the fact that the United States is coming off its first Olympic Gold in Indoor Volleyball at the 2020 Tokyo Olympics are converging to set the stage perfectly for the development and commercialization of a professional league. It just so happens that two will be launching this year.

Professional Leagues - Current Environment

In years past, international leagues were the only option for the US' best collegiate volleyball players who wanted to continue their playing careers. Some common destinations were Brazil's Super League, Argentina's Series A1, the Italian Superlega, the German Volleyball Bundesliga, the Polish PlusLiga, and the Russian Volleyball Super League.

Athletes Unlimited was one of the first more established organizations ($30M in institutional capital raised) to launch professional Volleyball stateside in 2021. After having aired previous seasons on Fox and CBS, it recently completed its third season and broadcasted games through an exclusive partnership with ESPN.

The two leagues launching this year that have garnered significant interest are the Pro Volleyball Federation (PVF) and League One Volleyball (LOVE). PVF beat LOVE in bringing its product to market, playing its first highly anticipated game on 1/24 in Omaha in front of a crowd of 11,000+ fans. LOVE will launch its pre-season in November 2024 and the regular season in early 2025.

Note: I also came across the Volleyball League of America as a fourth potential professional league when researching this piece. I chose not to spend too much time on it because a.) it’s not receiving any media attention, and b.) from their marketing, it feels like they are investing most heavily in their men's volleyball product.

See below for background information on each league.

Professional Leagues - How This Will Play Out

Although Athletes Unlimited had a first-mover advantage, I don't believe they will emerge as the predominant domestic volleyball league. The company has a slightly different mission to advance women’s athletics in general, not just Volleyball. For instance, they are simultaneously building women's Basketball, Lacrosse, and Softball platforms alongside the Volleyball product. Also, they don't operate like a traditional sports league but instead have a five-week tournament to showcase talent, drafting players onto different teams. Because of these differences, I want to focus on the two leagues I believe will have the most commercial viability as a traditional sports league.

League One Volleyball (LOVE):  LOVE raised a $35M Series B round in late 2023 from Left Lane Capital and Ares Management. Other notable names to participate in the deal included Amy Schumer, Jayson Tatum, Billie Jean King, partners at Fenway Sports Group, Candace Parker, Lindsey Vonn, and Kevin Durant. In total, the league has raised $60M.

LOVE will begin its pre-season in November 2024 and start the official season in 2025. It will launch with six professional franchises: Atlanta, Austin, Houston, Madison (WI), Omaha, and Salt Lake City.

LOVE is following a strategy similar to that of many European soccer clubs. They have been focusing on building a grassroots network at the youth level that will ultimately feed into their professional leagues. They currently have over 1,100 players participating on LOVE youth teams across 21 states. Through these efforts, LOVE is building brand recognition and a sizeable talent pool before playing its first match.

Pro Volleyball Federation (PVF): The second contender for the predominant professional volleyball league is the Pro Volleyball Federation. PVF has raised a total of $150M with notable names investing, including Trent Dilfer, Jason Derulo, Joe Burrow, Kerri Walsh Jennings, and the ownership group of existing sports franchises, including the Orlando Magic, Sacramento Kings, Chicago Cubs, and Las Vegas Golden Knights.

The league will look very familiar to the average sports fan, with a traditional city-based structure, home and away games, and a playoffs/championship format. Franchises include the Atlanta Vibe, Columbus Fury, Grand Rapids Rise, Omaha Supernovas, Orlando Valkyries, San Diego Mojo, and the Vegas Thrill.

PVF hopes to entice top-level talent to their league with salaries that align with other professional female sports ($60-$100k) and provide a league revenue share arrangement with the players. It has already secured media rights deals for this inaugural season consisting of a multiyear streaming agreement with Bally Live and Stadium and a broadcast partnership with CBS Sports to show ten matches along with the playoffs and championship.

In the long term, can multiple professional volleyball leagues survive and coexist? Although it’s great for exposure, the short answer, in my opinion, is no. The sports industry tends to have a winner-takes-all dynamic for a given sport. I predict that either one league will pull away as the predominant favorite, or at some point, they will merge and consolidate operations. There are merits to the unique business models of each league, but with what I know now, I would predict that the PVF has a higher likelihood of long-term success. The PVF is beating LOVE to market and striking when the iron is hottest, has a traditional and easily understandable season format,  and will attract top talent with favorable pay and revenue share agreements. These reasons lead me to give a slight edge to the PVF, but it's tough to say with any degree of certainty before seeing the LOVE product.

Other Investment Considerations

As increasing media rights packages have pushed traditional sports franchise valuations to all-time highs (See recent Sweat Ventures posts covering the Dallas Mavericks and Indiana Pacers transactions), emerging sports leagues present an opportunity to invest in an asset that is exposed to the same underlying value drivers but do so at significantly cheaper valuations, offering more upside potential. Take the UFC as an example. MMA was a fringe sport when the Fertitta Brothers bought the UFC for $2M in 2000. Through the professionalization of the product and acceptance by traditional media partners, MMA grew and became a mainstream sports entity. The UFC was ultimately sold for $4B in 2016.

Following this thesis and the success of the UFC, investors have increasingly been putting money to work in emerging sports leagues such as the PLL (Lacrosse), the MLP (Pickleball), and the MLC (Cricket). Volleyball presents the same opportunity to invest in a sport that is already mainstream but has not been successful at the professional level.

Additionally, Volleyball is particularly well suited to the tastes of millennials and Gen Z. These younger consumers prefer highlight clip packages and short-form content viewed through channels such as TikTok and Reels more than sitting down and watching full live games and matches. Volleyball as a sport is ideal for these viewing patterns. It's a fast-paced game, and action takes place in short intervals that are easy to digest in social and digital formats.

Lastly, one of the obstacles in the development of professional women's sports is that they are constantly compared to the male equivalent, which I think has been detrimental. People are reluctant to watch one or the other because they compare and contrast the male and female product. Volleyball is a unique opportunity for women's sports because consumers will not compare it to an established men's league. Fans will appreciate the women's game as Volleyball's standard bearer, which I think will be really powerful for the broader development of female professional sports.

Closing Thoughts

Jon Patricof, CEO of Athletes Unlimited, summarized it well in an interview with Sportcio when he said, "The future of Volleyball right now has never been brighter. When you get a virtuous cycle where the creation of more opportunities for pros to play leads to more pros playing, which leads to more advertiser interest, which leads to more media coverage, which leads to better television, and it all fuels one another." I will closely track the progress of the professional leagues and keep my eye out for interesting startups building technology solutions that capitalize on this wave of growth. Regardless of who the winners and losers are in this emerging sport, it’s safe to say that 2024 will be a massive year for the sport of Volleyball.