August 13, 2024

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There’s currently no private equity presence in college football and the NFL. That may be about to change for both. Also, what does the MSG Sports earnings report tell us about James Dolan’s empire?

— David Rumsey [[link removed]], Eric Fisher [[link removed]], and Colin Salao [[link removed]]

Private Equity Targets Football: NFL, College Poised for Investments [[link removed]]

John David Mercer-USA TODAY Sports

Slowly but surely, private equity money is making its way into football—at multiple levels.

The NFL remains on track to begin allowing franchises to sell minority ownership stakes to institutional investors by the end of this year. “We believe that would be something that could make sense for us in a limited fashion,” NFL commissioner Roger Goodell said [[link removed]] in July. That limit is 10% of any one franchise, which is lower than the threshold set by the NFL’s American counterparts at the NBA, NHL, and MLB, some of which allow private equity firms to hold as much as a 30% stake.

October’s owners meetings in Atlanta have been a loose deadline for when the NFL would like to approve its new private equity investment policy. This week, the league is said to be meeting with major firms like Arctos Partners, the Carlyle Group, Blackstone, CVC Capital Partners, and Dynasty Equity, according to Sportico [[link removed]].

Supply and Demand

No NFL team is currently up for grabs, but last summer’s $6.05 billion sale of the Commanders seems to have pushed the rest of the league to speed up the process around private equity. “Raising $3 billion is a lot of work,” new Washington owner Josh Harris has since said [[link removed]]. Last October, the league formed a new special owners committee that was tasked with evaluating institutional investors.

“The value of the franchises are reaching such levels, the opportunity to have more flexibility to provide financing and keep a family in control without having to sell major blocks of their ownership—there are models that can work,” Falcons owner Arthur Blank (above) told [[link removed]] Front Office Sports in February.

Doing Your Homework

U.S. private equity leaders are also targeting college football as a new investment avenue.

The Big 12 is exploring [[link removed]] bringing on a private equity partner to help bankroll the conference’s future as it tries to compete financially with heavyweights at the Big Ten and SEC. CVC has had conversations [[link removed]] with the Big 12, in addition to its reported upcoming talks with the NFL. That firm has also invested in the WTA, LaLiga, and Premiership Rugby in the U.K.

Last year, Florida State had talks [[link removed]] with Sixth Street about the private equity giant investing in the school’s athletic department. This year, RedBird Capital Partners and Weatherford Capital (of which former FSU quarterback Drew Weatherford is a partner) announced the launch [[link removed]] of an investment arm, Collegiate Athletic Solutions, intended to infuse up to $200 million into athletic departments.

Editors’ note: RedBird IMI, of which RedBird Capital Partners is a joint venture partner, is an investor in Front Office Sports.

MSG Sports Hits $1B Revenue Record, Fueled by Playoff Success [[link removed]]

Brad Penner-USA TODAY Sports

James Dolan has reaffirmed one of the oldest maxims in sports: Winning sells.

Dolan, owner of the NHL’s Rangers and NBA’s Knicks, and his Madison Square Garden Sports Corp. reported Tuesday a record-level set of corporate earnings that showed some of the impact from the deep playoff runs enjoyed this past spring by the two teams.

MSG Sports said it posted record revenue of $1.03 billion for its fiscal 2024, up by 16% from the prior year—and operating income of $146 million, an increase of 71% and also a company record. For the fiscal fourth quarter ending June 30, MSG Sports generated $227.3 million revenue, up by 79% year over year, and $52.3 million in operating income, dramatically reversing a comparable loss of $12.2 million from that period in 2023.

The figures follow a high-profile quarter in which both the Knicks and Rangers reached the second round of their respective league playoffs, the first time that’s happened since 2013, while the hockey team advanced to the Eastern Conference finals. The postseason runs helped recall [[link removed]] the team’s famed summer of 1994 that ended with a Stanley Cup title for the Rangers and seven-game NBA Finals loss for the Knicks.

“Our fans’ enthusiastic support for our teams this past year was evident in many areas of our business, from ticket sales and per-cap spending at the Garden to local TV ratings and increased engagement on social [media],” said MSG Sports COO Jamaal Lesane, in an earnings call with analysts.

There is already a carryover to the upcoming NHL and NBA seasons, with the two teams’ combined ticket renewal rates standing at about 94%.

Regional Angst

In the earnings call, Madison Square Garden Sports also continued the objections [[link removed]] from Dolan about the NBA’s recently completed [[link removed]] $77 billion set of national media-rights deals. Dolan has argued the agreements, despite the huge increase in fees compared to the current pacts, cut into his ability to generate revenue from local broadcasts.

“The [regional sports network] industry is already facing a challenging environment,” Lesane said. “The reduction in local telecasts [in the new NBA deals] further impacts this valuable part of our ecosystem, which teams have relied on to drive enhanced fan engagement.”

More Dolan Growth

The New York sports teams are not the only growing part of the Dolan empire. The Sphere, the next-generation $2.3 billion venue in Las Vegas that opened last year to great fanfare [[link removed]], continues to awe both sports and music fans. The NHL recently used [[link removed]] the building to great success for its 2024 draft, while UFC will be in there for an event Sept. 14. Most recently, Dead & Company completed a 30-date residency there, following prior concert stints by U2 and Phish.

Sphere Entertainment Co., the corporate entity that includes the Sphere and Dolan’s RSN operations, will report its next set of quarterly earnings Wednesday.

SPONSORED BY U.S. BANK

Beyond the Fairway With Collin Morikawa

Behind every great athlete is a dedicated team that turns personal aspirations into collective triumphs. From coaches and mentors to family and friends, this support system plays a crucial role in an athlete’s success. That’s the power of us [[link removed]].

Collin Morikawa began his PGA Tour career with 22 consecutive made-cuts—second only to Tiger Woods’s 25 cut streak. He is also a two-time major champion and two-time Olympian. Behind his success, he has a team committed to building his legacy and perfecting his game.

Learn how JJ, Kip, and Rian are dedicated players on Collin’s Untold Team [[link removed]].

STATUS REPORT Two Up, One Down, One Push

Nathan Ray Seebeck-USA TODAY Sports

Marlins ⬇ The franchise fired several front office and coaching staffers, including two assistant general managers and four field coordinators, according to ESPN [[link removed]]. Most of the fired staff were brought in during the eras of former CEO Derek Jeter and general manager Kim Ng. The Marlins (44–75, the second-worst record in the NL) are in the process of a rebuild under new general manager Peter Bendix.

CBS Sports ⬆ The network is adding former Panthers great Luke Kuechly and two-time Super Bowl champion Logan Ryan to its roster of game analysts for the 2024 season. Kuechly is known for high-level film analysis [[link removed]], while Ryan, who announced his retirement from the 49ers in April, has been posting football analysis online.

Sportsbooks ⬆⬇ Payouts for bets placed on the country to win the most gold medals at the Olympics differed due to the U.S. and China finishing in a tie. Luckily for U.S. bettors, none of them resulted [[link removed]] in a loss. DraftKings, FanDuel, and ESPN Bet used a “dead heat” rule that paid bettors half the amount; BetMGM deemed the U.S. the winner because of the silver medal tally, while some smaller sportsbooks even rewarded both U.S. and China bettors.

Sportradar ⬆ Q2 earnings were up 29%, the sports data and analytics company announced Tuesday. The company, which has partnerships with leagues like the NBA and NHL, also raised its outlook for the year by 1% and it is expecting strong double-digit revenue growth in 2025 driven by new sports rights and an expansion of existing products.

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Enter Into Kerri’s Athlete Archive

Front Office Sports and Upper Deck have joined forces to celebrate the nostalgia of sports, shining a spotlight on the childhood inspirations, career influences, and life milestones of the world’s most notable athletes.

In this episode of Athlete Archives [[link removed]], Kerri Walsh Jennings shares captivating stories about the key figures—both past and present—who have inspired her, her most memorable career moments, and her hopes for the next generation of athletes.

Check out [[link removed]] the full episode.

Conversation Starters Flavor Flav is giving a special bronze clock necklace to Jordan Chiles after she was stripped of her Olympic medal. Check it out [[link removed]]. Flag football will make its Olympic debut in Los Angeles in 2028, but other big sports will return to the Games, including cricket, baseball, and softball. See the full list [[link removed]]. Netflix released the first trailer for the hot-dog eating contest between Joey Chestnut and Takeru Kobayashi scheduled to stream live Sept. 2. Take a look [[link removed]]. Editors’ Picks Vegas Cops Threaten Boycott Over NFL’s New Face ID Credential System [[link removed]]by Margaret Fleming [[link removed]]The new system applies to the field, locker room, and press box. Venu, FuboTV Both Say Judge Has Power to Kill Their Business [[link removed]]by Daniel Kaplan [[link removed]]Venu says “a preliminary injunction would terminate the joint venture.” Can Noah Lyles Turn Olympic Beef Into Marketing Gold? [[link removed]]by Dennis Young [[link removed]]The “world’s fastest man” may have a popularity problem. Advertise [[link removed]] Awards [[link removed]] Learning [[link removed]] Video [[link removed]] Podcast [[link removed]] Sports Careers [[link removed]] Written by David Rumsey [[link removed]], Eric Fisher [[link removed]], Colin Salao [[link removed]] Edited by Matthew Tabeek [[link removed]], Or Moyal [[link removed]], Catherine Chen [[link removed]]

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