Key Takeaways
- • Jonathan Schindel, co-president and CFO of The Armory Foundation, argues in a Youth Today opinion piece that youth sports should not be treated as just another market to consolidate, citing its value as a public good alongside its economic opportunity.
- • The op-ed contends that nonprofits hold a structural advantage in youth sports because they have no shareholders, no exit timeline, and reinvest all revenue into facilities, coaching, equipment, and community access.
- • Former NFL player Ndamukong Suh is quoted at a Front Office Sports event saying private equity investors "are always gonna be looking for those returns," adding "I understand it, but I don't necessarily agree with it."
- • Izell Reese, CEO of RCX Sports (operator of NFL FLAG), argues private equity ownership can coexist with accessibility, saying "there's a right way to do it" after his company was acquired by Brand Velocity Group.
- • The author concludes that youth sports can generate profits, but profit should not be the primary purpose, and that the key test is whether organizational incentives align with young athletes' needs.
Summary
The author, Jonathan Schindel, co-president and chief financial officer of The Armory Foundation, which operates the world's busiest track and field facility in New York City, writes that private equity firms and growth-focused operators have made youth sports one of the hottest investment categories. He describes the sector as large, resilient and growing, with strong family and community demand and sustained participation.
Schindel acknowledges that consolidation can bring efficiencies, including access to capital for technology, operations and expanded access, and says there is nothing inherently wrong with profit-seeking companies entering the space. He warns, however, that unchecked profit goals can conflict with the interests of young athletes, particularly by pricing out lower-income participants. He frames the debate around choices such as whether facilities should prioritize elite revenue-generating programs or broad access for first-time participants, and whether competition schedules should be optimized for profit or athlete development.
He argues that nonprofits are structurally positioned to prioritize the second option of each trade-off, since every dollar generated can be reinvested and there are no investor return expectations or transaction timelines. He notes that critics often portray nonprofits as inefficient and private companies as innovative, calling the reality more nuanced, and that both models can succeed or fail. He cites nonprofit capacity to subsidize participation for families facing hardship and maintain programs that are not the most profitable.
Suh's comments are cited as capturing the tension: he said private equity can play a positive role but that "there needs to be a better way of doing it." Izell Reese, CEO of RCX Sports, which operates NFL FLAG and was recently acquired by Brand Velocity Group, told Sports Business Journal that while RCX sits under private equity, "there's a right way to do it," and argued that accessibility focus could accelerate growth of its programs.
Schindel concludes that the debate should center on whether organizational incentives align with the needs of young athletes rather than framing it as private equity versus nonprofits. He cautions against evaluating youth sports through the same lens as software, retail or college athletics, which has recently welcomed private equity. He states that youth sports can generate profits, but that profit should not necessarily be the primary purpose.
Schindel acknowledges that consolidation can bring efficiencies, including access to capital for technology, operations and expanded access, and says there is nothing inherently wrong with profit-seeking companies entering the space. He warns, however, that unchecked profit goals can conflict with the interests of young athletes, particularly by pricing out lower-income participants. He frames the debate around choices such as whether facilities should prioritize elite revenue-generating programs or broad access for first-time participants, and whether competition schedules should be optimized for profit or athlete development.
He argues that nonprofits are structurally positioned to prioritize the second option of each trade-off, since every dollar generated can be reinvested and there are no investor return expectations or transaction timelines. He notes that critics often portray nonprofits as inefficient and private companies as innovative, calling the reality more nuanced, and that both models can succeed or fail. He cites nonprofit capacity to subsidize participation for families facing hardship and maintain programs that are not the most profitable.
Suh's comments are cited as capturing the tension: he said private equity can play a positive role but that "there needs to be a better way of doing it." Izell Reese, CEO of RCX Sports, which operates NFL FLAG and was recently acquired by Brand Velocity Group, told Sports Business Journal that while RCX sits under private equity, "there's a right way to do it," and argued that accessibility focus could accelerate growth of its programs.
Schindel concludes that the debate should center on whether organizational incentives align with the needs of young athletes rather than framing it as private equity versus nonprofits. He cautions against evaluating youth sports through the same lens as software, retail or college athletics, which has recently welcomed private equity. He states that youth sports can generate profits, but that profit should not necessarily be the primary purpose.
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