The Week's Top 5 Stories
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Looking to get smarter on sports? You've come to the right place.
As a former college athlete and venture capital investor, I go beyond the headlines to break down the business of sports.
Let’s get into this week's top stories:
Serena Williams' Latest Wyn
Serena Williams is no stranger to success. Over the last decade, the 23-time grand slam champion has been working full-time on her second career as the Managing Partner of Serena Ventures .
Of the 85 companies she has invested in, 14 have reached unicorn status!
Now, Williams is ready for her third act.
Following other celebrity makeup entrepreneurs, she launched WYN BEAUTY by Serena Williams , a cosmetics brand formulated for movement.
Bottom Line - Celebrity-backed retail brands were the fastest growing brand type among makeup, with those companies growing sales 46% year over year. As the beauty category heats up, the tennis legend and entrepreneur is giving herself yet another shot at reaching unicorn status.
Arctos Closes $4.1 Billion Fund
Arctos Sports Partners, a private equity firm dedicated to the professional sports industry, recently announced the final close of Arctos Sports Partners Fund II, the latest iteration of its flagship sports fund.
Fund II and its predecessor fund, Arctos Sports Partners Fund I, represent the world’s largest aggregation of institutional capital dedicated exclusively to professional sports franchise investments.
Arctos is the only institutional investor approved to invest in multiple teams by MLB, NBA, NHL, MLS, motorsports, and European soccer federations.
Bottom Line - Sports as an asset class is booming and institutional investors are here to stay. The key factors contributing to lofty valuations among sports franchises are scarcity of assets, tangible tax advantages, and long-term revenue predictability driven by media rights.
Kansas City Says No to Stadium Funding
In a decisive vote, Kansas City residents recently rejected a proposal to use $2 billion in public funds for major upgrades to the Chiefs' stadium and to build a new stadium for the Royals in downtown Kansas City.
Other teams and cities have faced similar setbacks, but that hasn’t slowed a wave of stadium construction underway across the U.S.
Owners and cities often threaten relocation, but that is just one of several options. Usually, team owners find a new way to get money.
They can tweak their plans and ask voters again, build or renovate stadiums without public funds, or seek approval directly from a city council, county commission or state legislature.
Bottom Line - Public funding for private sports facilities is increasingly seen as a poor deal for taxpayers, challenging the narrative that cities must pay up or face losing their teams. While cities and team owners claim improved sports infrastructure is a catalyst for economic development, these upgrades primarily benefit the owners through higher revenues and franchise valuations.
Transfer Portal Shakes Up College Basketball
As of this Sunday, 1,450 Division I men's basketball players have entered the transfer portal, a 25% increase from last year, with numbers expected to hit 2,000.
This shift towards short-term commitments for better NIL deals is transforming the sport.
Today's players treat college tenures like free agency, seeking the best financial packages for their NIL rights each off-season.
The winning strategy has also shifted from freshman-dominated teams to those with veteran players. The age and experience of this year’s men's Final Four teams underscore the trend:
Team (Average Age)
- North Carolina State Wolfpack (22.4 years)
- Alabama Crimson Tide (22.0)
- Purdue Boilermakers (21.7)
- UConn Huskies (21.3)
High-profile departures, like Coach Calipari's move to Arkansas with a hefty NIL budget, also highlight the financial arms race extends to retaining key staff.
Bottom Line - In college basketball, finances run differently. Unlike college football, a single basketball player can significantly improve team performance. As a result, individual deals are much more likely to reach seven figures.
Darren Rovell launches Collectibles Media Company
Former ESPN sports business reporter Darren Rovell launched Cllct, a media website that will cover the sports collectibles industry.
Pronounced “collectâ€, the company raised $4 million from an investment group that includes owners of more than 20 professional teams across the NFL, NBA, NHL and Premier League.
“When COVID-19 hit and the collectible market exploded, memorabilia was suddenly being called a ‘true alt asset,’ as opposed to something that just fills a man cave†- Darren Rovell
Bottom Line - Collectibles have blossomed into an alternative asset class. Now, for the first time, there is a media company covering the $500 billion industry 24/7.
Until next time ???
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Experienced Business Owner Specializing in Strategic Marketing Solutions for Mid-Market Companies
10 个月I like your format, easy to read and straight to the point. Looking forward to following your work. Looking at the stadium finance piece, have you found any resources showing how private funding is opening up new revenue streams for owners/organizations? I'm fascinated to see how many more privately financed complexes will come in the future and go away entirely away from public funds.
Former Head of School - Senior Associate of Partner Development at Building Solutions for Real Estate - Educational Thought Partner - Providing Coaching & Guidance for Leaders & Organizations
11 个月Super interesting and insightful stuff! Thanks for sharing these stories and your wisdom!