Investing in Sports in Light of Their Investment in Us
The Weatherford family has a rich athletic tradition, with the majority of nine children participating in Division I sports. Our experiences in sports at all levels instilled values that continue to shape our identities and influence our approach to work at Weatherford Capital. We cherish foundational values such as commitment to relationships, teamwork, prioritizing the process over outcomes, and lifelong learning—all of which find their roots in the spirit of sports.
We are deeply grateful to the coaches, teams, parents, and processes that instilled the beliefs and practices we now pass down to our children, partially through their involvement in youth sports. As a result, we are excited to stand on the brink of unprecedented growth in an industry we hold dear. Through outstanding organizations like IMG Academy, a leader in sports education, and many others, we aim to invest in companies that support the sports ecosystem, shaping the hearts and minds of the next generation of leaders.
The Growing Landscape of Youth Sports
Youth sports are immensely popular in the United States, and a thriving industry has built up around them, enabling millions of young athletes to participate each year. Initially, youth sports were primarily organized through non-profits, but there has been a noticeable shift toward the proliferation of for-profit clubs, businesses, and organizations.
Approximately 30 million young athletes compete on teams, participating in an astonishing 50 million events yearly, from elementary to high school. This translates to about $40 billion in annual spending, which is expected to grow at an 8% CAGR to $70 billion by 2030 (Weatherford Capital Proprietary Source). Such growth positions youth athletics above major domestic entertainment markets, such as the box office (approximately $10 billion) and recorded music (about $11 billion). Additionally, a projected increase in population in the U.S. is likely to elevate participation rates. The number of U.S. residents aged 5–17 is expected to rise from an estimated 60 million today to 73 million by 2051 (Weatherford Capital Proprietary Source).
Positive growth indicators extend beyond participation numbers and spending. The professionalization of the collegiate sports landscape (including College Athlete Revenue Sharing, the transfer portal, and private equity investments in college sports) suggests that amateur athletics are becoming a thing of the past. Securing payment before embarking on a collegiate athletic career will no longer disqualify athletes from participation at the collegiate level. This change alone is poised to create significant structural shifts in the ecosystem. With larger financial stakes and fewer roster spots, we believe competition will intensify, driving an increased investment of time, energy, and money for those aspiring to play at higher levels.
Moreover, the combination of enhanced media coverage of amateur athletics (via platforms like Hudl, MaxPreps, and Baller TV), the rise of travel and club sports culture (such as the AAU circuit and travel sports tournaments), and growing investment in necessary infrastructure (including the introduction of PLAYS in the Youth Sports Act and the installation of 500 fields across the country by the U.S. Soccer Foundation in the past year) has made athletics more accessible for families willing to invest. In essence, youth athletics are actively working to replace organic barriers, such as distance to facilities, lack of teams or coaches, and lack of awareness, with artificial ones—primarily cost-related.
The Business Connections
While the youth sports ecosystem primarily focuses on direct-to-consumer relationships, there are also crucial business-to-business connections. We can categorize the main types of businesses in youth sports into three groups: (1) Core Services: The club themselves, recruiting young athletes, hosting showcases, and providing player development and education; (2) Expanding Reach: Businesses that support clubs and tournaments, as well as those offering registration software and technology to enhance the sports experience; (3) Broader Offerings: Services including insurance, facilities, travel, uniforms, and other related products.
The landscape of youth sports is vast and diverse, with many companies operating across various sports and age groups. While most businesses are small and fragmented, a few larger companies stand out. There is a notable disparity in company valuations, particularly between tech firms serving youth sports and traditional companies in other industry segments.
Increased access fosters competition as more athletes find their way onto teams and into programs. Consequently, parents are compelled to invest more upfront to maximize their children's chances of success, perpetuating a pay-to-play cycle with all of its challenges. Notably, children aged 13–17 from households earning more than $100,000 currently have a 48% participation rate in youth sports, which is significantly higher than the 28% participation rate of similar-aged children from families earning less than $25,000. Research indicates that the participation gap persists even in challenging economic times, further complicating the landscape of youth sports.
With all of those things considered, we see investing in the youth sports industry as an exciting opportunity to engage with a thriving sector that shapes future leaders. As enthusiasm for youth athletics grows, support for organizations that foster athletic skills and life lessons helps develop well-rounded individuals who embody teamwork, resilience, and commitment. For Weatherford Capital and our partners, this venture isn't just about financial returns; it's a chance to make a lasting, meaningful impact on countless lives.