Thinking of Buying a Sports Business in Australia? Here Are 3 Vital Questions to Ask

Australia’s sports sector generates around $20.1 billion in annual revenue, with profit of about $1.85 billion and average profit margins of 9.2 percent.

There are roughly 12,100 enterprises, almost 13,000 establishments and more than 110,000 workers involved in sports administration, clubs, facilities, betting and instruction, with revenue forecast to grow about 1.4 percent annually to 2031.

Growth is being powered by record broadcast deals in codes like AFL and NRL, record breaking attendances at major events, rising grassroots participation and ongoing investment in facilities for the 2032 Brisbane Olympics.

At the same time, segments like sports instructors face pressure from gyms and cost of living constraints, and sports betting is under scrutiny from tightening regulation and changing advertising rules.

1. Which Part of the Sports Value Chain Are You Actually Buying, and How Robust Are Its Earnings?

Why It Matters:

“Sports” covers very different business models, from professional clubs and leagues to stadiums, social competitions, coaching and betting.

Each segment has its own revenue drivers, cost structure and regulatory risks, so you need to be clear whether you are buying a participation business, a venue, a rights based administrator, a coaching operation or a wagering platform.

Earnings quality varies, with not for profit clubs reinvesting surpluses, facilities carrying heavy fixed costs and betting operators exposed to marketing and compliance costs.

What to Check:

• Exact industry segment, legal structure and whether the entity operates for profit or as a not for profit with member obligations.

• Historical revenue and profit trends against the sector’s 9.2 percent average margin, including how results moved during and after COVID disruptions.

• Key revenue sources, for example gate receipts, broadcast distributions, membership fees, sponsorships, facility hire, coaching fees or wagering margins.

• Fixed versus variable costs, including player payments, coaching staff, marketing, stadium or facility leases, technology platforms and insurance.

• Dependency on one or two events or seasons compared with more diversified, year round activity.

2. How Strong Are the Fan, Participant and Commercial Relationships That Underpin Revenue?

Why It Matters:

The sector’s growth has been driven by record attendances at AFL, NRL, Australian Open and Grand Prix events, rising participation in local sport and a surge in online sports betting.

A sports business with loyal fans, recurring participants and long term sponsors is far more resilient than one relying on once off events or casual users who may switch to other forms of entertainment.

What to Check:

• Membership and participation data, including active members, renewal rates, season ticket numbers and waiting lists.

• Crowd and usage trends at venues, leagues or programs over at least three to five years, not just one strong post pandemic rebound year.

• Diversity of customer segments, for example juniors, adults, older participants, corporates and community groups, and how cost of living pressures have affected each.

• Depth and duration of sponsorships, naming rights, hospitality packages and corporate partnerships, including any upcoming renewals.

• Digital engagement metrics such as social media reach, email databases, app usage and streaming audiences if relevant.

3. Is the Business Positioned for Regulatory Change, Technology Shifts and New Participation Trends?

Why It Matters:

Future growth will be shaped by bigger broadcast deals, investment for the 2032 Olympics, evolving gambling regulation and changing viewing and participation habits.

Operators that embrace technology, manage compliance and tap into new sports, formats and experiences are better placed to grow, while those that ignore these shifts risk margin squeeze or regulatory shocks.

What to Check:

• Exposure to regulatory issues such as gambling advertising limits, anti siphoning rules for broadcast rights, integrity standards and child protection obligations.

• Use of technology in ticketing, fan engagement, broadcast or streaming, performance analysis, facility management and online wagering where applicable.

• Plans to leverage major event investment, such as upgraded facilities or Olympic related infrastructure, and how these translate into future revenue.

• Ability to adapt formats, for example social competitions, shortened games, themed rounds or festival style events that attract younger and more diverse audiences.

• Risk management around safety, crowd control, player welfare, data security and responsible gambling, including insurance coverage.

Ready to Invest in a Thriving Sports Business?

With sector revenue above $20 billion, strong broadcast demand and high public engagement, sports businesses in Australia offer attractive long term opportunities across clubs, facilities, administration, coaching and betting.

Success depends on understanding exactly where the business sits in the sports ecosystem, the strength of its fan and participant base, and how well it is positioned for regulatory, technological and behavioural change.

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