Spectator Sports (U.S.) — NAICS 71121

A Histometrics rollup primer for public- and private-market investors.

1. Overview

The North American Industry Classification System (NAICS) — the U.S. government's standard scheme for coding industries — groups the entire live, paid-audience sports economy that happens outside casinos into one five-digit industry: 71121, Spectator Sports. It has three parts: the teams that field players (711211), the racetracks that host horse and auto racing (711212), and the independent athletes, racing owners, and support specialists who compete but belong to no franchise (711219) [1].

Read together, these three tell a single story with three very different endings. All are built on the same scarce commodity — live competition that draws a mass, real-time, emotionally committed audience — but the value accrues in completely different places, to completely different owners, on completely different trajectories. Teams are appreciating trophy assets held by billionaires. Racetracks are asset-heavy venues quietly reinventing themselves as gaming and media businesses. "Other" spectator sports is a vast, atomized world of sole proprietors — the jockeys, drivers, golfers, fighters, and horse owners — where almost nobody you can name is a public company.

For an investor, the industry as a whole is a lesson in where money hides. The federal receipts total for all three combined — about $56.3 billion in 2022 [2] — badly understates the sport, because the biggest cash engines (national media rights, sports betting, casino-scale gaming, and venue operations) are booked in other NAICS codes entirely. The real edge in reading this level is the contrast across its children: which is growing, who owns it, how concentrated it is, and how — if at all — you can buy in.

2. What's inside — the three child industries, and how they differ

The 71121 umbrella covers three sub-industries that share a customer (the fan) but almost nothing else about their economics or ownership. The table below is the heart of this primer; the sections after it cover the level as a whole.

Three contrasts drive everything downstream:

• Receipts vs. count run in opposite directions. Teams are only ~29% of establishments but ~78% of receipts; "Other" is ~61% of establishments but ~8% of receipts. A tiny number of teams command the money; a huge number of sole proprietors share the scraps.
• Ownership could not be more different. Teams are a billionaires' asset class with almost no public float. Racetracks are the one segment with real listed exposure — through gaming companies, not "racetrack" companies. "Other" is barely investable at all except through the promoters one step above the athletes.
• The growth stories diverge. Teams are riding a media-rights and scarcity boom; racetracks are managing a slow decline in their namesake business while a gaming engine grows underneath; "Other" is a passion-driven, high-risk world where the money is moving away from the competitors toward whoever owns the rights and rails.

3. How big it is (rollup figures)

Our ground-truth federal statistics for all of NAICS 71121. Note two vintages: employment, payroll, and establishments are 2023 County Business Patterns (CBP); receipts, firm counts, and concentration are the 2022 Economic Census (EC). These are reported figures, not a single-year income statement, and should not be read as a one-for-one snapshot [2].

Two numbers reveal the internal split better than any total. Payroll per employee averages about $236,000 across the level — an extraordinary figure — but it is a blend of roughly $330,000 per worker in teams (professional-athlete salaries), only ~$42,000 in racetracks, and ~$73,000 in "Other" (mostly trainers and race-operations staff, because the marquee earners aren't on anyone's payroll) [2][3][4][5]. Likewise, receipts per firm run about $47.5 million for teams, $16 million for racetracks, and just $1.6 million for "Other." One industry code, three different economies.

The undercount caveat is unusually large here — and it points in three different directions. Read $56.3 billion as a floor, not the size of the U.S. spectator-sports economy, which is several times larger:

• Teams' biggest cash engine is booked elsewhere. National media rights and league-wide licensing are collected at the league level (NAICS 813990, athletic associations), so the single largest source of money in professional sports sits outside 71121 entirely [3].
• Racetracks' biggest venues are reclassified out. When a track adds enough gaming that the casino becomes the primary business — a "racino" — the establishment usually moves to the casino codes (713210/721120), taking its slot, hotel, and betting revenue with it. So the highest-revenue racing venues in America are largely counted somewhere else [4].
• "Other" is defined by people the survey can't see. CBP and the EC count only businesses with employees. A jockey, golfer, fighter, or single-horse owner typically files as a one-person business, so the nonemployer world vastly outnumbers the 3,124 employer establishments here. Our ground-truth file contains no nonemployer totals, so none is stated [2][5].

The federal file also reports no attendance, wagering handle, media-rights revenue, athlete pay, margins, or — crucially — franchise value, which is where team investors actually make money and which the receipts figure cannot capture (see §5).

4. The investable universe — where value concentrates

Public-market access to this industry is thin, indirect, and — importantly — not distributed the way the receipts are. Teams hold ~78% of the money but offer almost no public float; racetracks hold ~14% but supply most of the listed names; "Other" holds ~8% and can only be reached through the promoters above it. Tickers appear here for reference; valuation and yield discussion is reserved for §10. All listings are on the New York Stock Exchange (NYSE) or Nasdaq.

711211 — Teams: scarce, controlled, at a discount. Leagues restrict who may own a franchise, so pure public plays are few and typically controlled companies (family super-voting shares) trading below the private-market value of the team: Atlanta Braves Holdings (BATRA/BATRK — the Braves plus Truist Park and mixed-use real estate), Madison Square Garden Sports (MSGS — the NBA Knicks and NHL Rangers), and Manchester United (MANU — an English club, U.S.-listed) [3]. Comcast (CMCSA) offers only diluted conglomerate exposure via Comcast Spectacor (the NHL Flyers). The Green Bay Packers are community-owned, but the shares carry no equity, dividend, or resale value [3]. Almost all real value sits in private hands — billionaire families and multi-team holding groups (Kraft, Kroenke, Fenway Sports Group, Harris Blitzer), plus, since 2024, capped minority stakes held by private-equity (PE) firms such as Arctos, Ares, and Sixth Street [3][12].

711212 — Racetracks: a gaming-and-real-estate bet in disguise. This is the one child with meaningful listed exposure, but treat nearly every name as a gaming company that happens to hold racing licenses: Churchill Downs (CHDN — the only large-cap whose identity is a racetrack, yet it earns most of its profit from gaming and historical racing), PENN Entertainment (PENN), Caesars (CZR), Boyd Gaming (BYD), and Bally's (BALY), for whom racing is immaterial; plus small-cap Canterbury Park (CPHC), the closest to a focused single-track play [4]. Two real-estate investment trusts (REITs) — Gaming and Leisure Properties (GLPI) and VICI Properties (VICI) — own racino/track real estate as landlords. Elite auto racing is entirely private: NASCAR (the France family, which folded in the former International Speedway Corporation tracks), Speedway Motorsports (the Smith family), and Penske's Indianapolis Motor Speedway; elite thoroughbred racing runs through The Stronach Group / 1-slash-ST and nonprofits like the New York Racing Association and Keeneland [4].

711219 — Other: buy the promoter, not the athlete. There are effectively no pure-play public companies here, because the "firms" are individuals. What you can buy sits one step upstream, at the promoters and rights-holders: TKO Group Holdings (TKO — UFC, WWE, and bull riding, extending into boxing), Liberty Media / Formula One Group (FWONK/FWONA — F1 and MotoGP commercial rights), and again Churchill Downs (the venue-and-wagering side the horse owners depend on) [5]. Direct participation is a private, high-net-worth world: full or syndicate racehorse ownership, motorsports-team equity, and — at the retail end — fractional racehorse platforms like MyRacehorse (shares from ~$100) [5].

Bottom line: the money is in the teams, but the listed exposure is in the racetracks' gaming operators and the "Other" segment's promoters. Anyone treating a generic "sports stock" list as a proxy for the whole industry is buying a small, unrepresentative slice.

5. How the money works

Underneath three different revenue mixes runs one shared engine and one shared truth.

The shared engine is media rights and the money that flows from wagering. Live sport is the last content that reliably draws a mass, real-time audience, so streamers now bid against broadcasters for it, pushing rights fees higher each cycle. The scale differs by child but the direction is common: the NFL's national media package alone runs more than $110 billion over 11 years (2023–2033) [8]; NASCAR's 2025–2031 auto-racing deal is worth $7.7 billion over seven years [7]; and combat-sports and F1 rights underpin the valuations of TKO and Liberty Media [5]. Legal sports betting amplifies all of it — the American Gaming Association reported roughly $16.9 billion of U.S. commercial sportsbook revenue in 2025 — which, while booked as a gambling industry elsewhere, deepens engagement and funds the purses that horse racing runs on [5][9].

The shared truth is that the durable value is in assets, not operating margins — but the asset differs by child:

• Teams: the franchise itself. Many teams earn thin or negative operating profit; the return comes from the rising price of the franchise. Supply is fixed (leagues control expansion), demand from billionaires and institutions keeps rising, and contracted media growth underwrites the cash flows — so values compound. The world's 50 most valuable teams were worth about $353 billion collectively in 2025, up 22% in a single year [6]. Team economics hinge on how socialized each league is: the NFL shares ~65% of revenue centrally (even small markets are highly profitable), the NBA ~40%, while MLB, NHL, and MLS pool only 10–25%, making local media and market size decisive [6].
• Racetracks: the license and the land. The physical plant costs money 365 days a year and earns it on a handful of race days, so operators stacked new revenue lines on top. Traditional pari-mutuel wagering (bets pooled, the track keeping a regulated "takeout") has shrunk for decades — handle was $11.26 billion in 2024, down ~3.4% [4]. The real engine is now gaming: slots, video lottery terminals, and historical horse racing (HHR) machines. Churchill Downs' live/historical-racing and gaming segments together produced the overwhelming majority of its ~$1.2 billion of adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in 2024; Kentucky's HHR handle alone was $6.8 billion in fiscal 2022 [4][14]. For auto tracks, media rights and marquee-date utilization (the Daytona 500, one big Cup weekend) dominate, and developable land is often the ultimate store of value.
• "Other": the bloodline, the charter, the personal brand. This is a power-law, tournament economy — a few winners take most of the money, and most participants lose. Industry groups estimate fewer than 10% of racehorses earn enough in purses to cover their care [5]; a NASCAR Cup car costs ~$20 million a year to run and most teams lose money, with the tradable charter (an equity-like entry right) becoming the real asset [5]; and top golfers or fighters earn enormously while most tour pros and undercard fighters earn little. Returns come from the appreciating asset — a proven bloodline, a scarce charter, a marketable name — not steady margins [5].

6. What drives demand

The whole level responds to a common set of forces, weighted differently across the children:

• Media-rights bidding wars — the single largest value driver for teams and elite auto racing, and the growth engine behind the promoter stocks [6][7][8].
• Legal sports betting — a rising tide that expands sponsorship, data, and engagement dollars and directly funds horse-racing purses, even though wagering itself is classified as gambling [5][9].
• Trophy-asset and institutional capital demand — a growing pool of ultra-wealthy buyers, and now PE funds, chasing a fixed number of franchises and marquee venues [6][12].
• Premiumization — renovated stadiums, suites, hospitality, and year-round venue programming lift per-fan spending well beyond ordinary seating [6].
• Women's sports and new leagues — the fastest-growing frontier on the teams side: WNBA franchise values rose sharply, with new expansion teams each paying a record $250 million to join [6].
• International events — the 2026 FIFA World Cup across the U.S., Canada, and Mexico is a near-term catalyst for soccer, hospitality, and sponsorship [10].
• Gaming legalization — for racetracks specifically, new authorization of HHR or slots can multiply a venue's revenue, while a new casino nearby can cannibalize it [4].
• Macroeconomics — attendance, premium hospitality, sponsorship, and merchandise all track employment, household income, and advertising budgets; motorsports and passion-driven ownership are especially cyclical.

7. Regulation

Spectator sports operate under a distinctive, segment-specific legal framework:

• Antitrust and media pooling. MLB retains a judge-made antitrust exemption (from Federal Baseball, 1922); other leagues do not, and American Needle v. NFL (2010) held that a league's teams are separate competitors, not a single entity [3]. The Sports Broadcasting Act of 1961 is what lets leagues pool and sell national TV rights collectively — the legal foundation of the multibillion-dollar media deals — though it does not reach cable, satellite, or digital distribution [3].
• Labor. Player pay, salary caps, and revenue splits are set by collective bargaining agreements (CBAs) with players' unions; the recurring risk is a lockout or strike that cancels games [3].
• League governance. Leagues self-regulate as cartels, controlling franchise sales, relocations, and who may own a team — including the 2024 rules that first admitted private equity [12].
• Racing and gaming. State racing commissions license tracks and set takeout; the federal Horseracing Integrity and Safety Authority (HISA), overseen by the Federal Trade Commission (FTC), imposes national thoroughbred safety and anti-doping rules — though its constitutionality is under active litigation with a circuit split likely headed back to the Supreme Court [4][5]. Every slot and HHR machine sits under separate state gaming authorities and tax formulas [4].
• Betting. Murphy v. NCAA (2018) struck down the federal ban on state sports betting; licensing, taxation, and integrity rules are now largely state-specific [3][5].
• Animal welfare. Political and legal pressure has all but ended greyhound racing — now prohibited in most states, with only a couple of tracks left — a live warning of how welfare politics can legislate a segment out of existence [4][5].
• Consumer protection. The promoter and venue names investors actually buy face federal "junk-fee" price-disclosure and anti-bot ticketing rules [5].

8. Consolidation

The standard concentration statistics for this level are actively misleading. The CR4 is just 6.8% and the HHI only 54.1 — numbers that read like near-perfect competition [2]. Economically that is backwards, and for three compounding reasons: the code blends three different economies; the relevant competitive unit is the league or sanctioning body, not the individual firm; and each franchise or marquee venue is a protected local monopoly. The one child whose statistics look genuinely concentrated is racetracks (HHI 570), reflecting a few large gaming operators sitting atop a long tail of tiny tracks — the closest thing here to a conventional industry structure [4].

So "consolidation" looks unusual across the level:

• In teams, it's vertical integration and a concentration of capital — a single owner combining a team with its arena, regional network, sponsorship platform, and surrounding real estate, plus institutional money entering through capped minority stakes [3][12]. There is little team-versus-team M&A because leagues are closed cartels with a fixed number of members.
• In racetracks, it's both vertical and horizontal — operators stacking live racing, HHR/gaming, hotels, online wagering, and real estate (Churchill Downs' multibillion-dollar acquisitions are the template), while REIT landlords own the property beneath the operators [4].
• In "Other," value is migrating upward from atomized competitors to whoever controls the events and rights — the 2023 UFC/WWE merger into TKO, and Liberty Media adding MotoGP to Formula One, being the clearest cases [5].

The common thread: across all three children, the money is flowing toward whoever controls the scarce rights, licenses, and venues, and away from operating the underlying competition itself.

9. Risks

• Media-rights dependence. The entire valuation edifice — teams especially — rests on ever-rising rights fees. Cord-cutting, streaming fragmentation, or a weak next rights cycle would stall the flywheel [6][8].
• Valuation and interest-rate risk. Record team multiples assume cheap capital and endless media growth; higher rates or slower growth would reprice franchise equity [6].
• Secular decline in core wagering. Pari-mutuel handle has fallen for decades; modern racing profitability depends on gaming revenue that exists only because state law allows it and can be taxed or competed away [4].
• Labor and cost inflation. A lockout or strike can erase a season; player and participant costs can outrun local revenue [3].
• Regulatory and integrity shocks. Loss of MLB's exemption, an adverse antitrust or HISA ruling, a betting-integrity scandal, or animal-welfare politics (which already ended greyhound racing) could impair value [4][5].
• Loss-making unit economics in "Other." Racehorse and motorsports-team ownership lose money for most participants most years — passion and asset plays, not income streams [5].
• Illiquidity, structure, and governance (for investors). Private team stakes are illiquid with multi-year holds and league approval; the few public names are controlled companies with thin float, often trading below private-market value, and the promoter proxies carry dual-class or tracking-stock structures [3][5][12].
• Data risk. Employer-based federal statistics omit the large nonemployer, league-level, racino, and recreational ecosystem — so the reported footprint materially understates the true one [2].

10. How to invest, and the outlook

Match the route to the child. Because value, ownership, and access diverge so sharply, there is no single "spectator sports" trade:

• For team exposure, the pure plays are scarce and controlled — Atlanta Braves Holdings (BATRA/BATRK), Madison Square Garden Sports (MSGS), Manchester United (MANU) — with Comcast (CMCSA) offering only diluted exposure. Real access is private and league-approved: direct ownership is billionaire-scale, but leagues now permit capped PE minority stakes (up to ~10% in the NFL, ~20% in the NBA/NHL/MLS) through firms like Arctos, Ares, and Sixth Street [3][12].
• For racetrack exposure, treat the listed names as a gaming-and-real-estate bet: Churchill Downs (CHDN) as the closest thing to a racetrack large-cap, Canterbury Park (CPHC) as the focused small-cap, the big casino operators (PENN, CZR, BYD, BALY) for incidental racing, and GLPI/VICI for landlord exposure. Elite auto and thoroughbred racing are private-only [4].
• For the "Other" segment, buy the promoters and rails, not the participants: TKO Group (TKO) and Liberty Media / Formula One (FWONK/FWONA); or, for direct (high-risk) participation, syndicate or fractional racehorse ownership [5].

What to underwrite. For public names: recurring contracted revenue, media-rights duration and renewal pricing, cash conversion, debt, and controlling-owner structure — and don't treat any one company as a proxy for the whole sports economy. For private deals: normalized cash flow, license and gaming-tax security, venue ownership vs. lease, purse/charter/bloodline dependence, governance rights, and exit liquidity.

Outlook (forward-looking judgment). The three children will keep pulling apart. Teams should stay the strongest — scarcity plus institutional demand keeps franchise values climbing — though future returns increasingly depend on whether streaming can monetize live sport as richly as linear television did, with women's sports and international expansion the highest-growth frontiers. Racetracks stay bifurcated: a slowly contracting racing sport wrapped around a growing gaming-and-media business, attractive where an operator controls a marquee asset and a secure gaming license, structurally challenged everywhere else. "Other" spectator sports remains a large and growing cultural economy whose value is captured mostly by the consolidated rights-holders, not the competitors. The single most important variable across all three is the same: the linear-to-streaming media transition and the direction of the next rights cycle. Net: one industry code, three distinct asset classes — a scarce appreciating trophy market, a gaming business in racing clothes, and a fragmented private passion economy — best analyzed separately, not as a single sector.

---

Sources

1. U.S. Census Bureau. "2022 NAICS — Industry 71121, Spectator Sports (structure and child industries 711211/711212/711219)." https://www.census.gov/naics/?details=71121&year=2022
2. Histometrics ingested federal statistics — U.S. Census Bureau County Business Patterns (2023, establishments/employment/payroll) and Economic Census, Concentration (2022, receipts/firms/CR ratios/HHI), NAICS 71121. Ground-truth statistics file. Child-level figures aggregate the 711211/711212/711219 primers and reconcile to these totals.
3. Histometrics primer — NAICS 711211, Sports Teams and Clubs (federal figures; public names BATRA/BATRK, MSGS, MANU, CMCSA; private ownership groups; league antitrust and media law). Draws on U.S. Census Bureau, SEC filings, and American Needle v. NFL (2010).
4. Histometrics primer — NAICS 711212, Racetracks (federal figures; CHDN, PENN, CZR, BYD, BALY, CPHC, GLPI, VICI; NASCAR/Speedway Motorsports/Stronach/Penske; racino reclassification; HISA). Draws on U.S. Census Bureau, SEC filings, and industry sources.
5. Histometrics primer — NAICS 711219, Other Spectator Sports (federal figures; TKO, Liberty Media/FWONK, CHDN; motorsports-team and racehorse economics; HISA; greyhound decline; MyRacehorse). Draws on U.S. Census Bureau, SEC filings, and industry sources.
6. Forbes (Brett Knight; Justin Teitelbaum). "The World's 50 Most Valuable Sports Teams 2025" and league valuation reports (team values; WNBA expansion fees; league revenue-sharing). 2025. https://www.forbes.com/sites/brettknight/2025/12/18/the-worlds-50-most-valuable-sports-teams-2025/
7. NASCAR. "NASCAR announces historic media rights agreements … $7.7 billion, 2025–2031 (Fox, NBC, Amazon, Warner Bros. Discovery/TNT)." 2023. https://www.nascar.com/news-media/2023/11/29/nascar-announces-historic-media-rights-agreements-with-fox-nbc-amazon-and-warner-bros-discovery/
8. NFL.com. "NFL completes long-term media distribution agreements through 2033" (~$110 billion package). 2021. https://www.nfl.com/news/nfl-completes-long-term-media-distribution-agreements-through-2033-season
9. American Gaming Association. "State of the States 2026" (U.S. commercial sports-betting revenue and handle). 2026. https://www.americangaming.org/resources/state-of-the-states-2026/
10. Fédération Internationale de Football Association (FIFA). "How the FIFA World Cup 2026 Will Work." 2023. https://www.fifa.com/en/articles/article-fifa-world-cup-2026-mexico-canada-usa-new-format-tournament-football
11. U.S. Small Business Administration. "Table of Small Business Size Standards" (NAICS 711211/711212 $47M; 711219 $16.5M). 2023. https://www.sba.gov/document/support-table-size-standards
12. Sportico / NFL.com. "NFL Owners Approve Passive Private-Equity Minority Investments" (Arctos, Ares, Sixth Street; capped stakes). 2024. https://www.nfl.com/news/nfl-owners-vote-to-allow-private-equity-funds-to-buy-stakes-in-teams
13. The Jockey Club / Equibase, via BloodHorse. "U.S. pari-mutuel handle $11.26 billion in 2024, down ~3.35%." 2025. https://www.bloodhorse.com/horse-racing/articles/tag/pari-mutuel-wagering
14. Churchill Downs Incorporated. "Reports 2024 Fourth Quarter and Full Year Results" (segment adjusted EBITDA); and Wikipedia/GGB Magazine, "Racino" (HHR economics; Kentucky HHR handle $6.8 billion FY2022). 2025. https://www.globenewswire.com/news-release/2025/02/19/3029135/12388/en/Churchill-Downs-Incorporated-Reports-2024-Fourth-Quarter-and-Full-Year-Results.html