The Pickleball Bubble?

The closing paragraph of my review of “The Pickleball Slam 2” contained an observation that the business side of the sport was exhibiting characteristics of frothiness similar to the dot-com bubble of the 1990s. Since that time, people have approached me with examples of recent events, which may be a sign that the bubble has already started to burst.

I don’t follow pickleball, with the exception of where it intersects with tennis. Consequently, I am not at all familiar with the various machinations on the pickleball tours. My ignorance is arguably exacerbated by the fact that they appear to frequently change their names, title sponsorships, and basic rules of the game. Additionally, from my outsider perspective, it seems like professional pickleball organizations are always in the process of merging and/or calling it off.

At the professional level, there appears to be an unsustainable money race for the “top talent” in the sport. Major League Pickleball (MLP) has attracted a lot of celebrity ownership groups in a sport where team valuations have reportedly soared to $10 million, up from a low of $100,000 when the league began play in 2021. Those valuations alone are signs of a bubble. Last November, MLP asked its players to take a 40% percent pay cut to help the league become financially viable. That is a leading indicator that the bubble might be starting to burst.

The Professional Pickleball Association (PPA) has recently implemented a “progression draw” that essentially grants the “top players” byes into the Round of 16. This was couched to players and fans as a chance to get lesser-known professional players exposure on the center court. However, it is difficult not to see it for what it is, which is a way to increase guaranteed money and ranking points to the sport’s top stars. In essence, rather than creating a level playing field, players are receiving preferential treatment, which creates stratification at the professional level.

The market for broadcast media is still trying to figure out the valuation and pricing of professional pickleball. However, outside of exhibitions like the “The Pickleball Slam 2,” which borrows celebrities from outside the sport, viewership has been modest at best. Another cynical way to look at the PPA “progression draw” is that it is an attempt by the sport to create its own recognizable celebrity players that will draw viewership.

The fundamental problem for pickleball is that the sport isn’t that entertaining to watch. If it was, professional ping pong would be a major television draw, and it simply isn’t. Broadcast media revenue is the predominant income source for other major sports. It is difficult to justify the current valuations of MLP teams and the PPA tour unless a high-dollar TV deal materializes.

Perhaps the most disturbing aspect of the pickleball bubble is that the frothiness of the sport is starting to attract individual investors who might not be sophisticated enough to understand the risks. A passion for pickleball and the hype surrounding the popularity of the sport is a breeding ground for financial fraud and scams. One such example is “Pickleball Rocks,” which was recently forced into bankruptcy. Investors were promised a 12 percent return over 18 months for each $25,000 investment. It is estimated that at least 250 individuals were caught up in this scheme.

While the fervor surrounding pickleball continues to rise, it’s becoming increasingly evident that the sport may also be creating a financial bubble. The facade and guaranteed money of professional pickleball tours are starting to show some cracks, and the quest for a television contract that would solve the problems of the sport doesn’t seem to be imminently forthcoming. More disturbingly, the allure of “easy money” has created an atmosphere where individual investors may fall victim to scams.

It might be time for pickleball to sober up.