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Happy Labor Day weekend, everyone ☀️

The first Monday in September has been a national holiday since 1894. It grew out of violent clashes between workers and police in Chicago, where workers hit the streets to demand an eight-hour workday — they pleaded for more reasonable hours and conditions amid the Industrial Age.

Today, in the spirit of time away from the office, we’ll discuss the booming pickleball market.

All this, and more, in just 4 minutes to read.

QUOTE OF THE DAY

“Taking smart risks can be very gratifying. Don’t be afraid to change the model.”

— Reed Hastings

WHAT ELSE WE’RE INTO

📺 WATCH: Warren Buffett and Charlie Munger on earnings multiples

🎧 LISTEN: Finding value in the oil market — Clay Finck with Josh Young

📖 READ: 10 key learnings from a group of entrepreneurs, with Sahil Bloom

AMERICA’S LOVE AFFAIR WITH PICKLEBALL

America’s hottest sport

Like many great ideas, America’s hottest sport today was invented by accident. It was the summer of 1965 on Bainbridge Island in Washington, and three friends were searching for something to do.

The story goes that Joel Pritchard, Barney McCallum and Bill Bell returned from a round of golf one day to find their families bored. On a whim, they set up a badminton court in their backyard, but they couldn’t find the small projectile used in the sport. They improvised with a perforated plastic ball, similar to a whiffle ball, and used makeshift paddles.

That’s how the pickleball was created. But it didn’t take off until the pandemic when families needed an activity together outside.

The game — a blend between tennis, badminton, and ping-pong — became particularly popular among older adults due to its relatively low physical demand compared to other sports like tennis. It’s known for its fast-paced yet accessible gameplay. And unlike golf, it’s relatively inexpensive and doesn’t require much equipment or space.

The sport has attracted millions of dollars in investment from corporations, families, and celebrities, including Tom Brady, LeBron James, Drake, and Michael B. Jordan. There’s a professional league, tournaments, and clubs popping up nationwide, attracting investors of all kinds.

“Look, I’ve been trying to find a way to extend my professional sports career beyond my 40s, even into my 50s, 60s, 70s. As long as I can, right?” Brady, a seven-time Super Bowl champion, said on Instagram. “And I think I got the answer. Seems like everyone else has the answer too. Pickleball.”

Pickleball craze

Sports valuations and player contracts have surged in recent years, well-outpacing inflation. Valuations for NBA and NFL teams have jumped beyond the reach of even some billionaires.

But pickleball offers a more affordable opportunity, with valuations of pickleball teams in the $1 million to $10 million range. (NFL teams are worth billions.)

Pickleball valuations are soaring as popularity grows. About 9 million Americans played pickleball last year, an 86% jump from 2021. Pickleball courts are popping up at resorts, hotels, wedding venues, and cruises, including Carnival and Royal Caribbean, which offer classes and tournaments on their ships.

“We may be getting close to a point where it’s almost too late to get in to expect a realistic return on investment,” the director of the sports business program at Washington University in St. Louis told The New York Times this year.

And now, tour companies catering to “picklers” organize pickleball-focused trips to other countries. Pickleball-crazed travelers are deciding where to stay and travel based on pickleball tournaments and court availability out of the more than 11,000 venues registered with USA Pickleball.

Pickleball participation is already approaching that of golf and tennis.

Celebrity boost

Major League Pickleball (MLP), founded in 2021, has grown from one event and eight teams in 2021 to six events and 24 teams. Aside from ticket sales, it’s also picking up sustainable sponsorships, a key revenue stream for sporting events. MLP wants to boost the number of amateur pickleball players to about 50 million by 2030.

Still, pickleball must develop TV/streaming deals to become more established because sponsors want reach and branding.

But deals with star athletes from Brady to James to Kevin Durant and Patrick Mahomes have brought high-profile attention to the sport. Familiar brands like Holland America, Anheuser-Busch, Skechers, and Carvana have all inked pickleball deals.

Facilities are also popping up for amateurs, perhaps the biggest market. Families, local municipalities, and businesses have invested $100,000 to $300,000 to open facilities (sometimes more) for the general public.

You can now find pickleball paddles, balls, and other equipment at retailers such as Dick’s Sporting Goods, Costco, and Walmart. The cost of entry is more affordable than tennis and golf, too — you don’t need a fancy club membership, meaning the pickleball market could be much bigger than that of golf or tennis.

Fun and healthy

Last year, Bill Gates — who grew up in Washington, near the game’s roots — revealed that he and his family have played pickleball for decades, long before most of the country. His father built a pickleball court at the Gates’ home over 50 years ago, and Gates still plays today.

“It’s just super fun,” the Microsoft founder said. “Win or lose, I can’t think of a better way to spend a summer day than as a Pickler…Despite its silly terms and funny name, pickleball is actually quite a sophisticated game. I enjoy watching YouTube videos where I can learn about tactics and strategies from the best players.”

Former NFL star quarterback Drew Brees has said pickleball is “an incredible medium that brings people together, connects communities, and promotes a healthy and active lifestyle.”

Between this celebrity endorsement and growing amateur popularity, supporters hope pickleball one day becomes an Olympic sport — perhaps as soon as the 2028 Summer Games in Los Angeles.

The author and inspirational guru Brene Brown has spoken for many Americans who are now hooked to the game, saying she’s “obsessed” and tries to play almost daily.

“The court might be the only place in the world where I’m fully in the now,” Brown said.

Dive deeper

For more, here’s a CNBC breakdown of the growing pickleball industry.