Some sport mergers make business sense

Acquisitions of sport companies are more common in the corporate business world where smaller entities are bought by larger companies seeking to expand their portfolio, competitive edge and market reach. Through acquisitions, Dick's Sporting Goods, for example, owns Golf Galaxy, Galyans, Affinity Sports and Game Changers Media.The merry-go-round of acquisitions is alive and well, as companies are seemingly bought and sold on a fairly constant basis. The Adidas Group acquired Taylor Made in 1997 but the golf company was sold two more times between 2017 and 2021. Liberty Media Corporation just acquired 90% of QuintEvents, a global provider of ticket, hospitality, and entertainment experiences. Liberty previously acquired Formula 1, the Drone Racing League, Kroenke Arena in Colorado, Overtime Sports, and Live Nation, among other businesses. Sport tech and sport betting companies were the rage of acquisitions during the coronavirus era as Google bought Fitbit, Lululemon acquired Mirror (home exercise), Flutter Entertainment bought Fan Duel, Nike acquired TraceMe, and DraftKing bought SBTech. Occurring less frequently and proving more difficult to manage than an acquisition are mergers which require significant integration as well as investments. Mergers are challenged by potential power struggles, branding and identity decisions, regulatory relationships, and organizational design complexities. The mergers of the NFL-AFL in 1966 and NBA-ABA in 1976 demonstrate the potential success that can resonate from decisions to integrate leagues. Following are examples of several eminent and potential mergers in sports.PGA TOUR-LIVWhile the answer to the contentious legal battle between the Saudi Arabia investment fund's golf child (LIV) and the PGA Tour is their proposed merger, there are other contenders that may disrupt the Kumbaya agreement. Courting the PGA Tour is Endeavor and Fenway Sports Group which owns the MLB Boston Red Sox, NHL Pittsburgh Penguins, a NASCAR team and Liverpool Football Club in the English Premier League. It isn't a coincidence that the U.S. Congress is investigating whether a potential merger between LIV and the PGA Tour violates antitrust laws prohibiting a monopoly. There is definitely speculation looming for how a merger will change the future of professional golf.PAC 12-MOUNTAIN WESTSo many are speculating that a merger between these two conferences would solve a lot of problems caused by the realignment merry-go-round that is sending schools to chase revenue dreams in the Power Five. The Pac-12 demise is seemingly inevitable with only four schools remaining in their portfolio, for now. Some have offered the idea that the Mountain West institutions will benefit from being rebranded as the Pac-12 and others have suggested a division structure of promotion and relegation within a merged conference. The odds that there will be a merger is a matter of who has the official intel on what is being discussed (or not) behind closed doors. No merger, for example, would be a revenue blow to the now PAC-4.XFL-USFLWhether the merger of the XFL and USFL will result in a new league branded as the USXFL, USFL-XFL, or another acronym of sorts remains to be seen. However, the initial decision to merge was extremely wise because it will put an end to the two leagues cannibalizing each other given the dismal viewership numbers this past year. Both leagues have speculated that there is a market for good football talent beyond the NFL and hopefully some innovation would pave the way for real spectator interest in spring 2024. While each league has had a slightly different approach, both key in on providing a complementary experience for football fans. For some NFL team fans, the merger would provide better games than they have seen this Fall.WWE-UFCThis merger in professional wrestling is another smart move to optimize opportunities, but in truth, it appears Endeavor Sports, the parent company for UFC will actually acquire WWE. The relationship is still being publicized as a merger of the two entities with Endeavor owning a 51% stake and WWE shareholders owning a 49% stake. Therefore, it appears both the WWE and UFC will continue with their current and separate branding while the pooling of resources and other closed-door decisions will shape the future. The merger is allowing for the creation of a powerful combined force in the world of professional wrestling.These mergers are still relatively uncertain, with the Pac-12 and Mountain West development in college sports being only speculation that may never come to fruition. Interestingly, Vince McMahon has ties with two mergers as the founder of both the XFL and WWE. McMahon cashed in on selling his majority stakes in both businesses.A deeper dive into each merger only validates the business nature of a dynamic industry where next-gen leaders will increasingly rely on innovation and adaptation to create sustainable futures. Once upon a time St. Mary's and St. Joseph merged their youth athletic teams and despite initial challenges, Calvert Catholic Schools has succeeded in continuing a tradition of sustainable sport programs that have led to state championships and abundant opportunities for students.Stay tuned for more interesting sports stories from around the world, throughout the country, and right here in Tiffin, Ohio.