Key Takeaways
- • Private equity interest in sports now spans events, agencies, technology, media, youth sports and consumer products, but few independent sports businesses have at least $10 million of EBITDA, pushing valuations to a premium when scaled assets come to market, according to guest columnist Chris Russo, CEO of Fifth Generation Sports.
- • Russo argues sponsors should consider anchor companies in the $3 million to $5 million EBITDA range, sports products and facility businesses, non-sports companies that can add a sports vertical, international targets, and overlooked small- and mid-cap public companies.
- • Examples cited include Crestview Partners' investment in The Gersh Agency and its December 2024 acquisition of You First, Bruin Capital's 2016 acquisition of Deltatre (later sold to Bain Capital in 2022), and the 2021 take-private of Collectors Universe at an $853 million equity value.
- • Russo contends that $10 million EBITDA sports platforms will likely remain scarce in the near term, shifting the central question from where to find such a business to which business can be built into the next valuable sports platform.
Summary
Writing in a guest column for Sportico, Chris Russo, CEO of Fifth Generation Sports, says private equity interest in sports now extends well beyond professional teams to events, agencies, technology, media, youth sports and consumer products. The main obstacle, he writes, is a shortage of independent sports businesses generating at least $10 million of EBITDA. When one does come to market, competition is intense and valuations command a premium.
Russo outlines several alternatives to competing for a small set of obvious platforms. The first is to acquire a smaller anchor company with $3 million to $5 million of EBITDA and build around it, though he acknowledges such businesses may carry thinner management depth, less sophisticated systems, customer or founder concentration, and add-on execution risk. He also suggests looking beyond asset-light services toward sports products and sports-related real estate, which can involve manufacturing, inventory, capital expenditure and real-estate expertise that deter generalist investors. He cites Unrivaled Sports, launched in 2024 by Josh Harris and David Blitzer with investment from The Chernin Group, as an example of physical facilities anchoring a broader participation business.
Another approach is to acquire a company not currently classified as a sports business and add sports leadership and commercial introductions. Russo points to Crestview Partners' 2023 investment in The Gersh Agency, which acquired sports representation and marketing agency You First in December 2024 to launch Gersh Sports. He also recommends international sourcing, citing Bruin Capital's 2016 acquisition of Italy-based Deltatre, which subsequently signed commercial deals with MLB, MLS and the NFL before Bruin sold the company to Bain Capital in 2022. Cross-border investing, he notes, brings regulatory, tax, currency and cultural considerations.
Finally, Russo highlights small- and mid-cap public sports companies with limited analyst coverage and low liquidity. He cites the 2021 take-private of Collectors Universe, parent of grading business PSA, by an investor group led by Nat Turner, D1 Capital Partners and Steve Cohen's Cohen Private Ventures at an $853 million equity value, and a 2022 $100 million capital raise at a $4.3 billion valuation. Russo concludes that the opportunity set is broader than the familiar list of established platforms, and that sponsors willing to do the work can reduce their dependence on the next obvious asset reaching market.
Russo outlines several alternatives to competing for a small set of obvious platforms. The first is to acquire a smaller anchor company with $3 million to $5 million of EBITDA and build around it, though he acknowledges such businesses may carry thinner management depth, less sophisticated systems, customer or founder concentration, and add-on execution risk. He also suggests looking beyond asset-light services toward sports products and sports-related real estate, which can involve manufacturing, inventory, capital expenditure and real-estate expertise that deter generalist investors. He cites Unrivaled Sports, launched in 2024 by Josh Harris and David Blitzer with investment from The Chernin Group, as an example of physical facilities anchoring a broader participation business.
Another approach is to acquire a company not currently classified as a sports business and add sports leadership and commercial introductions. Russo points to Crestview Partners' 2023 investment in The Gersh Agency, which acquired sports representation and marketing agency You First in December 2024 to launch Gersh Sports. He also recommends international sourcing, citing Bruin Capital's 2016 acquisition of Italy-based Deltatre, which subsequently signed commercial deals with MLB, MLS and the NFL before Bruin sold the company to Bain Capital in 2022. Cross-border investing, he notes, brings regulatory, tax, currency and cultural considerations.
Finally, Russo highlights small- and mid-cap public sports companies with limited analyst coverage and low liquidity. He cites the 2021 take-private of Collectors Universe, parent of grading business PSA, by an investor group led by Nat Turner, D1 Capital Partners and Steve Cohen's Cohen Private Ventures at an $853 million equity value, and a 2022 $100 million capital raise at a $4.3 billion valuation. Russo concludes that the opportunity set is broader than the familiar list of established platforms, and that sponsors willing to do the work can reduce their dependence on the next obvious asset reaching market.
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