August 31, 2023

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I’m certainly ready for some college football tonight, but one of my favorite things during the fall is NFL survivor pools — although they make for some nerve-wracking moments. NFL kickoff is just a week away, so if you’d like to play in a season-long contest with me and other FOS subscribers, click here [[link removed]] to sign up, and find more information at the bottom of today’s newsletter.

Today, a pair of billionaires are exploring further investments in the NFL and one of the country’s most influential sports agencies, while Barstool Sports deals with layoffs.

— David Rumsey [[link removed]]

Billionaire Steelers Co-Owner Seeks To Increase Stake In Team [[link removed]]

Kim Klement Neitzel-USA TODAY Sports

The sale of the Washington Commanders to Josh Harris’ group has sparked a new battle for a minority stake of the Pittsburgh Steelers.

Harris and longtime sports investment partner David Blitzer must sell their equity in the Steelers — estimated at less than 5% of the team — per NFL rules, which dictate that a majority team owner cannot hold interest in another franchise.

Billionaire Thomas Tull — film producer and Steelers co-owner since 2009 — is reportedly [[link removed]] in talks to acquire the equity from Harris and Blitzer, increasing his existing stake in the team led by Art Rooney II.

But others also want the equity, and the Steelers have 18 members in the ownership group beyond Rooney and Tull, including Pro Football Hall of Famer and Steelers legend John Stallworth. Staying within the team’s existing ownership group for this transaction would be the simplest path, as those investors have already been vetted by the NFL.

Harris, who has long been aware of the ownership requirements, began efforts to divest the Steelers equity even before the Commanders acquisition was completed.

A six-time Super Bowl champion and one of the NFL’s most popular teams, the Steelers are worth an estimated [[link removed]] $4.63 billion, 18th-highest in the NFL. A 5% stake would then be worth about $232 million. Harris and Blitzer acquired their Steelers equity in 2020, investing a reported $140 million.

Harris and Blitzer would subsequently be in line to turn a solid profit on their three-plus years of Steelers ownership — no surprise given the NFL’s continued revenue growth [[link removed]] and franchise value escalation.

French Billionaire Nears $7B Deal For Talent Agency CAA [[link removed]]

Shutterstock

Hollywood remains effectively shut down with the ongoing writers’ and actors’ strikes, but Francois-Henri Pinault continues to proceed with a $7 billion effort to acquire a majority stake in Creative Artists Agency — which would be a landmark deal in both sports and entertainment.

Nearly seven weeks after Pinault’s interest in the mega-agency first surfaced [[link removed]], the French billionaire is now reportedly [[link removed]] approaching a definitive agreement to acquire majority control of CAA from Texas-based private equity firm TPG, with industry sources telling Front Office Sports the deal is “close.” Negotiations are now expected to conclude in the coming weeks.

The $7 billion valuation represents a sizable increase on the prior $5.5 billion from last year, when CAA acquired rival agency ICM Partners. It’s also possible that Temasek Holdings, a Singapore state-owned investment company, will increase its existing stake in CAA in the Pinault deal.

Pinault’s move shows a high amount of optimism in the face of significant headwinds across the agency business. Not only is nearly all film and television production shut down — the industry’s first tandem strike since 1960 — but sports representation is facing its own existential challenges.

CAA oversees nearly $18 billion in sports contracts and represents leading athletes such as MLB two-way phenom Shohei Ohtani [[link removed]], NFL superstars Josh Allen, Joe Burrow, and Justin Jefferson, as well as 12-time NBA All-Star Chris Paul. But agencies’ ability to negotiate deals are now constricted by a range of factors including cutthroat competition for clients, pressure on commissions, and rookie-scale contracts and draft slotting.

Pinault, the husband of Hollywood star Salma Hayek, is part of an expansive family business that is the leading shareholder in the parent company of Gucci and other luxury brands, and also controls the Christie’s auction house.

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Barstool Sports Reportedly Set to Lay Off 25% Of Its Employees [[link removed]]

Barstool Sports

The new era of Barstool Sports is beginning with some major layoffs.

Founder Dave Portnoy reacquired [[link removed]] 100% of the company from PENN Entertainment in the wake of its ESPN Bet deal [[link removed]] and had made it known that cutbacks would be coming. This week, employees have been discussing the moves, with some announcing [[link removed]] their termination on social media.

The number of employees impacted will reportedly represent almost 25% of Barstool’s workforce, according [[link removed]] to the New York Post. Barstool had added around 300 employees since PENN’s original investment in 2019 and recently counted a staff of 430.

PENN’s $500 million-plus acquisition of Barstool was fully completed earlier this year — after which the controversial media brand was sold back to Portnoy for a token $1. For the first six months of 2023, Barstool had a net loss [[link removed]] of $16.1 million, according to PENN’s recent SEC filing.

Now, Portnoy — at one time uncertain [[link removed]] to be a part of Barstool’s long-term future — is tasked with making the company he founded in 2003 profitable again. In the aftermath of the PENN-ESPN deal, Barstool CEO Erika Ayers has stressed [[link removed]] a renewed focus on content production.

Midwest Expansion

The layoffs come as Barstool is opening a new office in Chicago — the new home of the popular “Pardon My Take” podcast.

Costs to build the 40,000-square-foot space are still unknown, but it will include [[link removed]] a basketball court, content recording studios, and a golf simulator.

Conversation Starters A college volleyball match in Lincoln, Nebraska drew 92,003 fans — a world-record crowd for a women’s sporting event. Check out the aerial view [[link removed]]. The “Tunnel Walk” has been a central part of Nebraska Football game days since 1994. On Wednesday night, Nebraska’s record-breaking women’s volleyball team took its turn [[link removed]]. Alabama tickets are the most in-demand of any college football team, per StubHub. The top 10 [[link removed]] includes Notre Dame, Michigan — and Deion Sanders’ new-look Colorado.

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Editor's Picks NBA Returns to UAE As Middle East Spreads Billions Across Sports [[link removed]]by Andrew Cohen [[link removed]]Neighboring Qatar has already invested in an NBA team. NFL Team Values Soar to Record $5.1B Average Amid Media Deals, Sales [[link removed]]by Andrew Cohen [[link removed]]Four NFL teams raised their value 20% or more since last year. How Robert Kraft And The Patriot Way Influenced Latest Media Hiring Wave [[link removed]]by Michael McCarthy [[link removed]]Since 2002, there has been fascination with Bill Belichick’s secretive, successful organization. Your Chance to Win in Winner-Takes-All

Front Office Sports is partnering with Splash Sports to bring you a Season Long NFL Survivor Contest [[link removed]].

This contest follows a winner-takes-all format, meaning only one participant will be declared the winner and receive the entire prize of up to $2,250. In the event of multiple winners, the prize will be divided equally among all the winners. The grand prize is dependent on the number of entries. Deadline to sign up is September 10, 2023.

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