2023 has not been a good year for mergers and acquisitions. So much so that some analysts doubt they will reach US$3 trillion in 2023—a figure that was commonly achieved in the past decade. Rising interest rates, geopolitical conflicts, and increased risk aversion among investors have all combined to cause this slump. But there is one industry bucking the trend, where M&A activity is booming: the sports industry.

According to Bloomberg, there has been intense activity involving millions in this sector so far this year, including the merger of the two largest wrestling and mixed martial arts leagues (for $21 billion), the sale of the NBA’s Charlotte Hornets basketball team ($3 billion), and the proposed merger of the PGA and LIV golf leagues, among others.

Why all the interest? According to Bloomberg, the sports business has shown remarkable resilience that has held up in the wake of the pandemic, when lockdowns drove a surge in the number of hours spent watching entertainment on television or streaming services. Furthermore, it is a sector in which the number of leagues and franchises is limited, compared to a growing pool of investors interested in the business. The numbers speak for themselves: the combined value of the 50 largest sports franchises on the Forbes list jumped 90% between 2018 and 2023, reaching US$256,000 million.

Among the main factors behind this boom is the value of broadcast and streaming rights, which continues to grow. It reached US$55,000 million in 2023 and could reach US$65,000 million in 2025.

Investors also see an opportunity to create value through economies of scale and the potential to identify more valuable players by merging the leagues. In fact, it is estimated that some 180 clubs—representing about 6,500 players—are part of groups that own multiple teams.

The sports craze is here to stay. In September, Goldman Sachs created a unit focused on sports franchises within its investment banking division.