Team Insight

10 • Team Insight ~ May/June 2024 teaminsightmag.com interesting to the fans. "And then probably most importantly, the advent of sports betting here in the U.S. and the explosion in esports," he adds. "ose are just a few of the areas, but the space has gotten red hot." Among the newer investor groups is Branded Velocity Group (BVGS), a New York-based PE firm that counts New York Giant's legend Eli Manning as a partner. e firm launched a sports-focused vertical in late 2022 with a plan to "target companies in sports-adjacent categories – in both legacy categories and emerging sub-verticals – with the goal of accelerating brand growth, providing financial flexibility and driving economic impact for all stakeholders." Professional sports teams and leagues are also being considered as investments. BVG's first sports-related acquisition was Score Sports, a 49-year-old team uniform supplier based in Wilmington, CA. BVG Partner's Drew Sheinman said at the time of the acquisition, "We are at a moment in time where influencers across sports, business, entertainment and culture are collaborating and pushing boundaries in groundbreaking ways." In a white paper last year, Baird, the investment firm, outlined how societal, eco- nomic and technological shis are creating investment opportunities in the team equip- ment space through increased participation, sales and pricing power. Matt Elberts, direc- tor in Baird's global consumer investment banking group, tells Team Insight: "e secu- lar tailwinds have never been more powerful or better understood." The NIL Impact on Investments Among the newer and most powerful fac- tors driving growth cited in the report is the arrival of NIL (name, image and likeness) deals, which allow amateur athletes to "cash in on their shining moments," especially those adept at social media, with the finan- cial incentives serving as a catalyst for early and continued sports participation. e report highlights how social-media interac- tion continues to "humanize" elite athletes and drive connections with fans. "NIL is going to be huge," says Elberts. "e same way parents tried to get their kids on scholarship or into elite schools via sports, we will see the same effect from NIL." Relatedly, the loy valuations of profes- sional sports teams, boosted by soaring media rights deals, are expected to trickle down across team sports levels as younger players aspire to the riches of professional players. Baird writes in the study: "As diverse economic opportunities, player compen- sation and social media stardom grow and gain visibility, participation and interest in team sports will expand at every level." e spread of legalized sports betting is another new factor more likely to "pay div- idends for all sports stakeholders, including players," according to Baird's study. Also helping drive sports participation and viewership is the breakout year in 2023 for women's sports, marked by record game attendance and viewership as well as the formation of major media deals. Continued investments in youth clubs, specialized leagues, advanced coaching facilities and in- creasingly sophisticated onboarding systems were also cited as boosters for team play. Among tech, tools measuring the impact athletes absorb while playing promise to ad- dress threats from high-impact sports. Data generated by sensors are elevating training and coaching techniques and possibly cre- ating "gameday excitement" for fans and advertising opportunities for brands. Finally, the social benefits of team sports are seen becoming an even bigger driver of participation with growing concerns around youth anxiety, depression, obesity and screen time. "Youth sports is the foundation of our culture and have become a parental obsession," points out Elberts. The Allure Of Team Sports From an investor standpoint, Baird ex- pects that similar to Fox Factory's purchase of Marucci, other firms in the action sports space will increasingly look to team sports businesses as a way to diversify holdings. Boosting valuations in the team sports space is a "growing new investor base," including several angel investors as well as well-heeled athletes looking to capitalize on sports-re- lated investments. As an example, Nobull, the training footwear brand, secured an investment from the NFL in December 2023 and then saw Mike Repole, best known for building Vitaminwater and Bodyarmor into beverage giants, acquire a majority stake in the com- pany in July 2023. In January, Tom Brady became the second-largest shareholder aer merging his wellness brand, TB12, with Nobull. Many current and former pro athletes have joined forces with traditional PE firms to invest in existing and new youth sports opportunities, joining blue-chip institutional investors that have formed funds to support investments in sports and related media and entertainment areas. Baird wrote in its study: "Athletes, celebrities, influencers ("person- alities") and private equity have recognized the opportunity and are jockeying to invest in the category and we expect to see this cur- rent momentum continue." Among recent PE deals, Platinum Equity, which revived and sold Schutt Sports aer acquiring the football equipment maker out of bankruptcy proceedings in 2010, this past January acquired both Augusta Sportswear Brands and Founder Sport Group as it saw an opportunity to consolidate the frag- mented uniform space. "e core market for youth sports apparel and accessories has grown steadily over the past decade, but the ecosystem is highly fragmented and, in TEAM TRENDS "THE CORE MARKET FOR YOUTH SPORTS APPAREL AND ACCESSORIES HAS GROWN STEADILY, BUT THE ECOSYSTEM IS HIGHLY FRAGMENTED AND, IN MANY WAYS, INEFFICIENT." LOUIS SAMSON, PLATINUM EQUITY

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