Emerging Leagues Should Look to Be Big Fish in Smaller, Expanding Ponds

Emerging Leagues Should Look to Be Big Fish in Smaller, Expanding Ponds

The WNBA awarded expansion franchises to Cleveland, Detroit, and Philadelphia in late June. The announcement came six months after the NWSL chose to place its 16th club in Denver.  

While there’s nothing inherently wrong with any of those cities, none are widely viewed as desirable free agent destinations by pro athletes in other leagues, either (certainly, not like New York, Los Angeles, or Miami). And all have at least three NFL, NBA, NHL, or MLB teams competing for the local sports fans’ attention.

It’s logical to wonder if leagues outside the big four would be better off standing up franchises in less saturated markets with fast-growing populations and making their clubs the biggest fish in smaller expanding ponds. Cities like Austin, San Antonio, Raleigh-Durham, Nashville, Charleston, Salt Lake City, Omaha, Boise, Charleston, and Albuquerque all could make sense depending on the sport.

“It’s not about the market’s ranking or the number of inhabitants there—it’s about the size of the fan base,” Stephanie Alger (chief growth officer, LOVB). “Cities like Madison, that are populated with an incredible youth, college, and pro ecosystem of volleyball, prove that. The fans show up for the home team’s games and in these markets, our resources go further. That enables us to enhance their experience, make a bigger impact, and grow the sport sustainably.”

Cleveland, Detroit, and Philadelphia all have well-respected NBA ownership groups and venues that can play host to WNBA games. They’re also all major metropolitan cities with large corporate presences. Denver would fit that description too.

But playing in an ill-fitting arena isn’t a good thing. While some WNBA clubs sell-out (see: Golden State Valkyries averaging 18,000 fans/game), on average, teams across the league are drawing just ~11,000 fans/game this season. The typical NBA arena seats more than 18,000 people.

“Venues are critical—you want to play in a right-sized arena that creates the best experience for fans and players,” Alger said. “Even in cities where we have access to NBA-sized facilities, we’ve intentionally chosen smaller venues if it can deliver a better atmosphere.”

And all four of the expansion franchises cited will be forced to compete with long-established big four teams for sponsorship dollars and the local attention (including some outside their owner’s portfolio).

Sure, market size remains important to long-term media rights valuations.

“A big market can make running a sports or entertainment business easier and more valuable,” media consultant Patrick Crakes said.

But emerging and challenger leagues shouldn’t be worried about that—not until they reach critical mass. These properties should instead focus on the athletes, cultivating rabid local fanbases, and establishing mutually beneficial partnerships.

"The advantage of anchoring a new promotion in markets, particularly those outside the top ten, is tied to local relevance,” Crakes said. “All the revenue toggles that come from engagement within the market can be customized and optimized for a local fan experience. Being a priority matters when it comes to revenue generation and brand capital and it's a straighter shot in smaller markets."

While many brands remain focused on long-form media consumption and logo exposure, LOVB has found success aligning with companies who value its youth to pro ecosystem and getting their products into the hands of kids playing on its associated club teams, and those enamored with the league’s expansive social reach.

Sure, all things being equal sports teams would prefer to have a larger local market to draw from. There are only so many people willing to attend a sporting event in Austin, Madison, or Omaha.

But LOVB doesn’t need to draw 18,000 fans/game for its clubs to be profitable. It needs less than 5,000. And the league is convinced it is easier to capture proportionally more attention, to generate more buzz, and ultimately do bigger business in secondary or tertiary markets.

“If more people in your city care about your team and are talking about it at the water cooler, on a Zoom, or in the bar, that is going to generate more fandom and ultimately lead to more revenue,” Alger said.

The league’s youth to pro model also gives the league an established and captive audience to tap into. LOVB was able to spur interest out of the gate by connecting its nationwide network of junior volleyball clubs and their players to the pro organizations.

In addition to Austin, Madison, and Omaha (that club is called LOVB Nebraska), LOVB has teams in Salt Lake City, Houston, and Atlanta. Madison, the smallest of the league’s markets, is a top performer. 

LOVB is planning to expand to eight franchises in Season 3 and it’s easy to see a path to 16. So, some major cities will eventually end up with franchises (as they have in the WNBA and NWSL). High profile ownership groups in top five DMAs have already expressed interest.

“When the right owners are committed to growing a sport, their efforts can strengthen and elevate the entire ecosystem,” Alger said.

But look for LOVB to largely choose markets in the years ahead where its clubs can be the ‘talk of the town’ and not get lost in a crowded pro sports landscape. The league has found many of those cities are also often willing to invest nominal amounts of capital into facilities and/or infrastructure to bring a smaller or emerging property to town.