This summer I saw numerous stories about the greed and leverage boys targeting sports, professional, college and youth sports. Youth sports? Is nothing safe from the clutches of private equity underwriters (PEU)? Apparently not.
Two PEUs are behind youth oriented Unrivaled Sports, Josh Harris of Apollo Global and David Blitzer of Blackstone. They used their personal wealth accumulated from their respective firms to fund the venture.
College sports is high on the list for new PEU investment. A legal settlement on top of Name, Image and Likeness (NIL) deals for players will have many college teams looking for a PEU partner.
The greed and leverage boys love secure revenue streams and price inelastic environments. Remember these guys graduated from at least one institution of higher learning. Many have buildings in their name from funding big capital projects.
It will be interesting to see how they split up the sports industry without encouraging real competition for prime assets. It used to be club deals, then it was speaking code and sending messages through the media.
Who might approach your alma mater for a cut of their ticket/box seat revenue or a slice of a student's NIL money?
Also, the NFL just approved allowing PEUs to own up to 10% of any team. Other leagues invited the barbarians in years ago.
What happens when billionaire owners add billionaire PEU founders to their ownership groups? How fast will politicians funnel public money to team infrastructure?
Remember in PEU land, everything is a secret, from fees to the calculation of returns to whether they have an undisclosed stake in the failure of an affiliate. It's all proprietary information, protected by non-disclosure agreements.
I hate to see these shuckers wreck yet another industry. They can't help it. It's the way they compete. Tilt the playing field, then fee, fee, fee.
Greed is not a role model. Ask the parents who had their workplace decimated by PEU ownership. Unfortunately, so many have grown up in a world dominated by PEUs (the last two decades). That may explain this:
Just because politicians Red and Blue love PEU does not mean I have to. I vote no and no and no again.
