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Billionaire Larry Ellison’s SailGP predicts it will break even as early as next year as it steps up a global expansion aimed at establishing the professional sailing league as the Formula 1 of the water.
The competition that the Oracle co-founder started in 2019 returned to New York’s harbour for its second race in the city on Saturday. Amid light winds, SailGP’s 10-boat New York harbour race was forced to cancel its third and final heat of the day. Racing resumes on Sunday afternoon.
The league’s 50ft tall catamarans are designed to lift out of the water — or foil — which reduces drag and allows the sailboats to accelerate to almost 100km.
These speeds — combined with an occasional capsize — give the event the look of a Formula 1 auto race, an appeal the league hopes will broaden its reach beyond sailing aficionados.
On Friday, SailGP announced that Mubadala, the Abu Dhabi sovereign wealth fund and one of the league’s biggest sponsors, will launch a Brazilian team that will compete alongside nine other boats in the league’s fifth season. The deal underscores the league’s effort to grow into profitability as soon as next year, according to officials.
“We have taken the view that we want to keep pushing the value of the league by that growth,” said Andrew Thompson, SailGP’s managing director. “We are forecasted to break even, I would say, likely at the end of next season if not season six,” he said. “We got there sooner than anticipated, which is great.”
“Some host venues pay a large sum as well as sponsorship directly for that race. Others are really sponsorship-driven,” he said. “We are getting to the stage where many of our events are now profitable, but there are a significant portion of them that aren’t.”
Media revenue “is not a significant sum today”, Thompson said. SailGP races are broadcast on CBS and online.
Ellison, a longtime funder of the America’s Cup sailing race and chair at Oracle, remains a big backer of the league. His software company has given SailGP $2.3mn in exchange for sponsorship, according to a regulatory filing last year.
In New York, SailGP is also benefiting from Wall Street cash, for example, from Ken Griffin’s financial firm Citadel, which sponsored waterside lounges. Some VIPs enjoyed a ride in chaser boats alongside the catamarans as the races were going on.
SailGP is one of nearly a dozen emerging sports leagues that is drawing private equity investments, according to a report this month from JPMorgan. Others include drone racing, lacrosse, pickleball and US women’s basketball.
“There’s a risk that rising valuations in emerging sports result from investors having been priced out of major sports leagues whose valuations are soaring,” JPMorgan said.
In November, billionaire investor Marc Lasry led the acquisition of the US SailGP team. Other teams are still owned by SailGP, but Thompson said: “I would expect by the end of season five that none of the teams will be owned by SailGP and they will all be in third-party hands.”
Ryan McKillen, an investor in the US SailGP team and a former founding engineer at Uber, said in an interview that traditional sailing can be “incredibly boring to watch”.
But with the speed of SailGP, “we have an extreme sport”, he said. “It is not sailing any more.”
