The Power of Celebrity: A New Wave of Sports Team Ownership

Sports Media in 2023, Essay #3: Why celebrity ownership means more for sports than just familiar faces in the crowd

(Re)-Introducing Sports Media in 2023

This will be the third and final essay in the Sports Media in 2023 mini-series, a short collection of essays intended to shine some light on the shifting tides in the world of sports and dissect key trends at the intersection of traditional and digital media.

After this essay, I will return to broad topics ranging the business of media, sports, streaming, and more.

In case you missed my previous essays in this mini-series, check them out below:

• Since when does Big Tech care about sports?

• The Sports Fanhood Crisis & Growing the Game via Docuseries

These essays (and more) can also be delivered directly to your inbox - just hit the subscribe button below, and a big thanks to those who already do!

Now, let’s talk shop.

Familiar Faces in the Crowd

Since moving to NYC in 2019, I have made it a priority to see as many professional sports games as possible. Having been raised a New York sports fan in Massachusetts (thanks to my Yonkers native dad), it was my first opportunity to enjoy games as a hometown fan. In addition to feeling more comfortable wearing pinstripes to the ballpark, there was another novel element to my fan experience here. More than I had ever experienced at the TD Garden or Fenway Park, the air of celebrity was far more present and visible at sports games in New York.

For example, in discussing Knicks games with friends, the question of who was in attendance (in addition to the omnipresent Spike Lee) seemed nearly equally important to the contest’s actual outcome or Julius Randle’s stat line. In taking a step back, this makes some sense. NYC is a major market and home to many celebrities, and I am sure that what I have observed here is even more heightened in Los Angeles for example. That said, previously this is where the intertwining of sports and celebrity had ended in my view - just like me, they are fans of the game (albeit with much better seats). However, recent developments in the world of sports team ownership may justify further examination of just how powerful this overlap can be.

An Expensive Hobby

Not so long ago, sports ownership was viewed primarily as an expensive hobby. Due to limits on both the supply (# of teams are capped in most major leagues) and demand (few could afford such an investment), the market was highly illiquid, and franchise’s astronomical price tags made ownership prohibitively expensive for all except a select few. As such, many deemed sports ownership as a pursuit of prestige, the most select of social clubs, and a passion project.

However, we have seen this shift slightly in recent years as certain leagues (notably the NBA) have opened their doors to investment from private equity firms - indicating the potential promise of financial returns to institutional investors.

These days it seems like every couple of months, a new headline emerges touting the unprecedented price tag on a new sports franchise for sale - most recently, the Phoenix Suns sold to Matt Ishbia for $4bn in December 2022. Though sports teams are not typically thought of as substantial drivers of free cash flow, the influx of private capital and skyrocketing valuations franchises are fetching are attracting a new wave of investors.

As the worlds of culture, media, and investing have become increasingly intertwined (e.g., Lebron’s SpringHill Company or Kim Kardashian’s SKKY Partners), we are seeing a new form of team ownership arise - celebrities.

What’s in the Water in Wrexham?

The best documented (literally) example of this recent phenomenon is Rob McElhenney and Ryan Reynolds’ purchase of Wrexham FC, a Welsh football club, for a reported $2.5mn in 2021. Though this price hovers far below those cited above, Wrexham was playing in the fifth (and lowest) tier of English football and faced severe financial concerns at the time.

Like many, McElhenney and Reynolds grew up passionate sports fans and experienced first-hand the type of impact a local team can have on the community (Rob in Philly and Ryan in Vancouver), which is precisely what the two sought out in a potential investment. In Wrexham, they found the oldest Welsh football team in existence (founded in 1864) and a small yet fervant fan base reminiscent of the passionate, pint-seeking patrons of the fictional Crown & Anchor pub in Apple TV+’s Ted Lasso.

But I won’t let myself tumble too deep into that Ted Lasso rabbit hole. Back to Wrexham - The two actors’ plans extended far beyond those of the typical franchise owner however, and their novel approach to franchise monetization illustrates how the power of celebrity can translate to tangible operating benefits for a sports team in non-obvious ways, all starting with the documentary covering their investment and the team’s plight: FX’s Welcome to Wrexham.

The Celebrity Flywheel

Beyond being a highly entertaining and informative lens into lives of McElhenney / Reynolds and their involvement in Wrexham, the Welcome to Wrexham doc is a primary example of how the “celebrity flywheel” can be a powerful lever for sports franchises under celebrity ownership. Said differently, the doc is the first example (of a few listed below) illustrating how McElhenney and Reynolds were able to use their names, connections, dedicated fanbases, and affiliated brands in order to drive tangible value for their newly acquired football club.

Let’s dive a bit deeper to bring this innovative approach to life:

1. THE DOC

   1. Production Revenues: Simply put, McElhenney and Reynolds will make money on the production and distribution of Welcome to Wrexham. Though the commercial details aren’t publicly available (up front fee vs revenue share, etc.), if I were in McElhenney or Reynolds’ shoes, I would reinvest some of this initial capital back into the club - with the hopes that new season orders continue to drive cash moving forward.

   2. New Fanbases: Distributed primarily on Hulu (with limited linear releases on FX network), the doc immediately has access to the US-based streaming service’s 48mn subscribers - most of whom, I’d venture to say, had never heard of Wrexham or its football club prior. Even a minor conversion of doc viewers to Wrexham fans poses material upside for the small-town club.

   3. ParentCo Ecosystem: Via FX’s ownership by The Walt Disney Company, Welcome to Wrexham is presented with many opportunities to capitalize on cross-company partnerships and synergies. An early example of this is when McElhenney and Reynolds came on as hosts of ESPN’s Sportscenter, ahead of ESPN+ coverage of the upcoming Wrexham FC match versus Sheffield United in January ‘23.

2. THE SPONSORSHIPS

   1. Existing PortCos: Reynolds in particular has leaned into cross-promo opportunities to drive buzz and sponsor revenues for Wrexham FC, starting with another one of his portfolio companies, Aviation Gin. In the early days post Wrexham purchase, the team announced Aviation as its Official Gin Partner - in a deal complete with special edition bottles and merch - and more recently, added the Aviation logo to Wrexham FC’s kit (or jersey) sleeves.

   2. Other Affiliates: Though not an owner, Reynolds also landed a sponsorship deal with TikTok (where he has nearly 20M followers and is a prominent celebrity influencer), whose logo is now front and center on Wrexham’s home and away kits. This feels like an especially salient example of the “power of celebrity” as we see one of the largest and most relevant media companies in the world paying for brand affiliation with the small Welsh football club.

3. THE GOODWILL

   1. As somewhat suggested with the TikTok deal, the “goodwill” or benefits associated with McElhenney and Reynolds’ name and likeness is undoubtedly another primary factor at play here in Wrexham’s commercial success. Though difficult to quantify, the strong and extensive fandoms associated with these two celebrities have elevated the club’s relevance and accomplishments to a level that would be likely unobtainable without the A-List ownership group.

All that is to say, it is clear that the impact of McElhenney and Reynolds’ purchase of Wrexham FC extends well beyond the $2.5mn they originally invested. However, will celebrity owners and new kits successfully elevate Wrexham to the promised land of the English Premier League? Only time will tell.

Recreating Wrexham’s Success

Unsurprisingly, Wrexham’s success has opened the floodgates for further investment in sports leagues and franchises from celebrities - which feels especially opportune as the US market experiences booms in both sports media content (covered in my previous essay here) and adoption of non-traditional sports.

In just the past three years, we have seen:

• The Rock stepping up as a primary investor in alternative professional football league, the XFL

• Michael B. Jordan following McElhenney and Reynolds’ footsteps across the pond with his purchase of AFC Bournemouth

• A slew of celebrities and athletes jumping into the recently formed, red-hot Major League Pickleball - including Kate Upton, Heidi Klum, Michael Phelps, and others

• Ryan Reynolds putting his hat back in the ring as a potential bidder for his hometown Ottawa Senators

The example count is rising, but what remains unclear is if the dedicated approach taken by McElhenney and Reynolds in their ‘Wrexham playbook’ can be recreated by others with these new investments. What cannot be argued however is that as sports and media become increasingly intertwined, there inevitably will be more and more opportunities to grow creatively grow teams, leagues, and sports - and this example is just the beginning.

Where to Learn More…

As always, there are plenty of places to learn more about celebrity ownership and the prominent Wrexham FX success story. Here are some of my favorites uncovered during my research…

Podcasts:

• The Town with Matthew Belloni: Rob McElhenney on Merging Soccer, Celebrity, and a TV Empire

• Sporticast: Ryan Reynolds, Michael B. Jordan, and The Future of Ownership

Articles

• Sportico: Ryan Reynolds & Rob McElhenney Win Welsh Club in Test of Media Value

• The Athletic: Ryan Reynolds & Rob McElhenney’s Effect on Wrexham

And, let’s not forget our primary case study - with Season 2 coming at some point this year!

TV:

• FX’s Welcome to Wrexham (Season 2 coming in 2023, date TBD; available on Hulu)

Wrapping Up

If you have enjoyed reading this post, I encourage you to share and subscribe as there are many additional topics around the corner. That said, thanks for reading, and stay tuned for what’s next!