The Pickleball Effect

The butterfly effect is the idea that small sparks can trigger chain reactions far larger than anyone expects. In business, these sparks often look trivial at first, but they end up reshaping entire industries.

Napster is one of the clearest examples.

Launched in 1999 by Shawn Fanning as a peer-to-peer file-sharing platform, it reached 20 million users within months. By 2001, more than 60 million people had tried it. U.S. music sales peaked at $14.6 billion in 1999 and fell by half over the next decade.

That shift in behavior set the stage for Spotify (SPOT), which now has more than 600 million active users.

Apple’s iPhone release had a similar impact. Introduced in 2007, it sold 1.4 million units in its first quarter.

The transition from a mobile-only-device to and internet-connected-tool created surprising pin action.

In 2008 the company rolled out the App Store. It opened with 500 apps and passed 1 billion downloads in less than a year. For the first time, independent developers could put their software directly into the hands of millions of iPhone owners.

That distribution model unlocked entirely new businesses. Ride-hailing companies like Uber, social platforms like Instagram, and food delivery services like DoorDash scaled because the App Store gave them instant reach. What began as a feature inside one device became the foundation of a global mobile economy measured in trillions.

Between 2019 and 2020, tennis experienced its own butterfly effect that helped to send several stocks to new all-time highs…

After years of stagnation, participation in the United States suddenly jumped.

The timing aligned with pickleball’s rapid move from backyard hobby to mainstream. In 2019, about 3.5 million Americans played pickleball. By 2022, participation had surged to 13.6 million — a gain of more than 200% in just three years.

The Sports & Fitness Industry Association named it the fastest-growing sport in the country during that stretch. Cities rushed to add facilities, with a 650% increase in outdoor courts across major metros over seven years. Austin became a showcase, supporting nearly 10,000 active players and seeing 92% court utilization by 2024.

Rather than cannibalizing tennis, pickleball acted as a funnel.

Millions who started with pickleball graduated to the larger, more established sport. By 2024, the U.S. Tennis Association reported 25.7 million Americans playing tennis, up 1.9 million from the year before and its fifth straight year of growth. A quirky pastime that seemed inconsequential in 2019 had become the accelerant for a tennis boom.

Just look at recent tournament ratings.

Wimbledon 2025 was the most-watched edition in six years, with ESPN’s coverage of the finals averaging 2.9 million viewers and peaking at 4 million. Streaming engagement on ESPN+ soared 163% year over year. In the U.K., the BBC logged 69 million digital content requests tied to the tournament, its highest ever.

The U.S. Open, playing out right now, is following suit.

Fan Week drew 239,307 fans before the main draw, capped by a record 54,020 attendees at Arthur Ashe Kids’ Day. Tennis has moved from sport to cultural festival, pulling in fans with music, fashion, and lifestyle alongside the matches.

On Holding (ONON), the Swiss athletic company backed by Roger Federer, has been one of the clearest winners from the racquet-sport surge.

Its strength lies in premium positioning aimed at affluent consumers who see sport as aspirational. Federer’s ownership stake gave the brand immediate credibility, but it was the signings of Iga Świątek and Ben Shelton in March 2023 that cemented On’s arrival in professional tennis.

Świątek left Asics, a brand she had worn throughout her rise to world No. 1, to become On’s first female athlete. Shelton walked away from Nike to sign the brand’s first active men’s deal. Both moves put On front and center at Wimbledon, the U.S. Open, and other globally watched events.

In Q2 2025, revenue reached CHF 749.2 million, up 32% from the prior year. Direct-to-consumer sales grew 47% and accounted for 41% of total revenue.

Management raised full-year guidance to CHF 2.91 billion with gross margins above 60%. Nike’s margins sit in the mid-40s, a reminder of the gap between mass-market athletic wear and On’s luxury profile.

Since its IPO in 2021, ONON shares have nearly quadrupled from post-IPO lows.

Ralph Lauren has seen a similar lift from tennis’s renewed cultural momentum. As the official outfitter of Wimbledon and the U.S. Open, Ralph Lauren ties its brand directly to the aspirational image of the sport.

Disney, through ESPN, monetizes the record-breaking viewership and streaming engagement. LVMH leverages its luxury presence across tournaments, from Moët & Chandon champagne in player boxes to Louis Vuitton athlete collaborations that resonate with affluent audiences.

A sport that looked like a novelty in 2019 sparked a renaissance in tennis, drew millions of new participants, filled stadiums, and reignited global attention. The brands aligned with that energy are already capitalizing.

Bottom line: Spotting major cultural shifts can help investors get YEARS ahead of the street.