| From | Front Office Sports <[email protected]> |
| Subject | Peloton Cuts 784 Jobs, Hikes Prices |
| Date | August 15, 2022 11:36 AM |
Links have been removed from this email. Learn more in the FAQ.
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August 15, 2022
Read in Browser [[link removed]]
POWERED BY
The turmoil [[link removed]] continues in the Miami Dolphins front office. Embattled owner Stephen Ross has reportedly changed his mind about long-term plans to hand over the team to vice chairman Bruce Beal. Instead, Ross will pass the reins to his daughter, Jennifer Ross.
Peloton to Cut Nearly 800 Jobs, Raise Prices [[link removed]]
Peloton
Peloton CEO Barry McCarthy wrote in a letter to employees Friday that the interactive fitness company is “making the hard choices” that will lead to the elimination of 784 jobs, a major reduction of its retail locations, and price increases for its most-expensive products.
The changes detailed in the letter obtained by Front Office Sports were the most dramatic since McCarthy, a former Spotify CFO, replaced embattled CEO John Foley in February.
Peloton will raise the price of the Bike+ by $500 (now $2,495) and the Tread by $800 ($3,495).
After a meteoric rise early in the pandemic, Peloton lost nearly $757 million in the first three months of this year, and its valuation — once at about $45 billion — has dipped 90% in less than two years.
Bloomberg [[link removed]] was the first outlet to report the letter.
Restructuring Gains Steam
The restructuring plan already included closing warehouse and retail locations as demand slowed from earlier in the pandemic.
Peloton currently has 88 stores in the U.S. and Canada. The letter stated that the company “will reduce [its] retail presence across North America, although the closures may not occur this year.” The delivery of its interactive products, which had been handled by employees, will be outsourced, which will cut delivery costs in half. Peloton will also outsource its customer service teams.The company will eliminate its North American field operations warehouse, which will result in a “significant reduction in our delivery workforce teams.”
“Any decision we make that impacts team members is not taken lightly, but these moves enable Peloton to become more efficient, cost effective, and agile,” McCarthy wrote.
Editor’s note: For more on this story, click here [[link removed]].
Carolina Panthers Submit $82M Repayment Plan for Failed HQ Project [[link removed]]
Carolina Panthers
NFL practice facilities are expensive to build — but for the Carolina Panthers, not building one is proving quite costly as well.
GT Real Estate, a company owned by Panthers owner David Tepper, submitted a plan in the U.S. Bankruptcy Court in Delaware to repay creditors and resolve all claims related to the team’s abandoned development in Rock Hill, South Carolina.
The plan would have GT Real Estate put $60.5 million into a trust dedicated to paying back contractors, subcontractors, and creditors.The company would also pay $21.1 million to York County, which provided $21 million toward the project.DT Sports Holdings, another Tepper-owned entity, has already paid $20 million toward debts related to the project.
The repayment scheme must be approved by the court, and GT Real Estate anticipates the hearing will occur in October.
The $800 million design included the team’s headquarters, practice fields, a 5,000-capacity stadium, and indoor practice center. GT Real Estate, which invested $170 million in the project, filed for bankruptcy in June.
Double Trouble
Tepper Sports & Entertainment also backed out of a similar project for its MLS team, Charlotte FC.
Last month, the organization dropped plans to be part of a public-private partnership at Charlotte’s Eastland Mall where the company would build a training facility for the club, its academy, and its MLS Next Pro team across 20 acres.
SPONSORED BY NIELSEN
Turn Team Loyalty Into Brand Loyalty
The FIFA World Cup 2022™ is a singular chance for broadcasters, platforms and brands to connect with a massive global audience.
With football being one of the most popular sports across the world’s top 10 largest economies, there is no doubt that the Word Cup presents an unparalleled opportunity [[link removed]] to engage with fans well beyond the matches. It offers a chance for the entire media ecosystem to score big with fans, and turn team loyalty into brand loyalty.
In Nielsen’s latest report [[link removed]], they showcase data and insights that helps brands, broadcasters, platforms and streamers make the most of the event. See how you can capitalize on the excitement. Download now [[link removed]].
China’s Cycling Market Projected to Reach $16.5B by 2026 [[link removed]]
Shutterstock
The world’s second-largest economy has seen a major cycling boom as pandemic-related gym closures continue and people avoid crowds.
China’s cycling market is expected [[link removed]] to reach $16.5 billion by 2026, according to Research and Markets. That’s a significant bump from last year, when the sport’s market was estimated [[link removed]] to be between $12 billion to $15 billion.
Cycling brands globally are feeling the benefits of the estimated 20 million people participating in the sport across China.
Compared to the same period last year, American bicycle brand Specialized reported 20% to 30% growth in its Beijing stores from March to June. He Dong, who oversees the Beijing franchised dealer of Specialized, says the growth would be double that number if it weren’t for a shortage of bike products. He added that for every model sold, at least 10 customers are waiting for their bike.
Feng Baozhong, vice president of the Chinese Cycling Association, expects cycling’s popularity to continue even after the pandemic, citing China’s growing affluence, the growth of the sports industry, and increased concerns about health.
“The pursuit of health will not vanish, so I think there is a good prospect for the sustainability (of cycling),” Feng said.
Around the World
Research and Markets projects the global bicycle market to reach $78 billion by 2026, up from $54.7 billion in 2020. The estimation is attributed to technological advancements, growing global health awareness, and rising fuel/energy prices, among other reasons.
The U.S. market was estimated at $9.5 billion in 2021.
Xponential Fitness Generates $60M in Q2 Revenue [[link removed]]
Xponential Fitness
Xponential Fitness — the owner of several fitness brands including Pure Barre, YogaSix, and Rumble — exceeded expectations in the company’s latest earnings report.
The largest boutique fitness franchiser in the U.S. with 2,357 studios, generated [[link removed]] $59.6 million in revenue in Q2 — a 66% increase year-over-year — surpassing [[link removed]] Wall Street estimates by 21%.
Net income reached $31.5 million in Q2, compared to a net loss of $8 million.The company sold 251 franchise licenses and opened 128 new studios in Q2.As of June 30, it had $29.3 million of cash, cash equivalents, and restricted cash.The company reported $131.7 million in total long-term debt.
Xponential has accordingly raised its full-year revenue outlook, anticipating its current state of business to maintain its pace as it continues to expand its reach.
The California-based company projects full-year revenue to range between $211 million and $221 million, up from a previous guidance of between $201 million and $211 million.
Xponential expects to open a total of 500 to 520 new studios in 2022, up 53% compared to FY2021.
Going Public
In June 2021, Xponential filed [[link removed]] for an initial public offering after a year-long delay caused by the pandemic. At the time, the company was seeking a valuation of roughly $1.3 billion.
A month later, Xponential went public raising $120 million in its IPO by selling 10 million shares for $12 apiece. The transaction also included [[link removed]] a $200 million private placement by investors.
FRONT OFFICE SPORTS PRO
The Continued Growth of Blockchain Gaming
Front Office Sports Pro [[link removed]] provides actionable, timely insights on the most promising opportunities where sports meets industry. Each month, members receive three industry reports, access to our private market deals database, industry investor directory, and weekly emails providing insights from the platform.
Our most recent report [[link removed]], the Continued Growth of Blockchain Gaming, explores:
The blockchain gaming industry grew 2,000% in the past year from Q1 2022. The first half of 2022 saw top funds in the NFT and blockchain gaming space raise a cumulative $10.5 billion in the capital. According to the Newzoo report, the Game Industry was estimated to be worth $192.7 billion by the end of 2021.
Be the most-informed member of your team with cutting-edge reports on the most tactical opportunities where sports meets industry. No jargon, no BS, no agenda.
Join today [[link removed]]!
Conversation Starters The Atlanta Dream’s rebuild [[link removed]] is bigger than basketball. The WNBA team’s new owners have made sweeping changes since taking over in 2021 — and the franchise is at the forefront of the league’s social justice initiatives. WWE is one of the best-performing sports companies trading [[link removed]] on public markets this year. Its international expansion strategy and the return to live events have been keys to its success. Tomorrow on The C-Suite, Front Office Sports’ Chief Content Officer Lisa Granatstein sits down with Jessica Berman, NWSL Commissioner, for an inside look at how she’s changing the game for women’s soccer. Tune in [[link removed]] at 2 p.m. ET for a behind-the-scenes look.*
*Sponsored Content
Today's Action
MLB
08:10 PM
Dodgers (-170) at Brewers (+145)
Bet Now [[link removed]]
MLB
03:10 PM
Tigers (+190) at Guardians (-225)
Bet Now [[link removed]]
MLB
07:05 PM
Cubs (-140) at Nationals (+120)
Bet Now [[link removed]]
*All times are EST unless otherwise noted.
*Odds/lines subject to change. T&Cs apply. See [[link removed]] for details.
Question Of The Day
Do you participate in any fantasy sports leagues?
Yes [[link removed]] No [[link removed]]
Friday’s Answer
48% of respondents drink soda at least once a week.
If this email was forwarded to you, you can subscribe here [[link removed]].
Written by A.J. Perez [[link removed]], Owen Poindexter [[link removed]], Abigail Gentrup [[link removed]], Justin Byers [[link removed]] Edited by Matthew Tabeek [[link removed]], Brian Krikorian [[link removed]]
MORE FROM FRONT OFFICE SPORTS:
The Leadoff [[link removed]] - Daily business of sports podcast
Front Office Sports Pro [[link removed]] - The most promising opportunities where sports meets industry
Front Office Sports Learning [[link removed]] - Professional education at the speed of culture
Copyright © 2022 Front Office Sports. All rights reserved.
80 Pine Street Suite 3202 New York, NY 10005
Advertise [[link removed]] / Update your preferences [link removed] / Unsubscribe [link removed]
Read in Browser [[link removed]]
POWERED BY
The turmoil [[link removed]] continues in the Miami Dolphins front office. Embattled owner Stephen Ross has reportedly changed his mind about long-term plans to hand over the team to vice chairman Bruce Beal. Instead, Ross will pass the reins to his daughter, Jennifer Ross.
Peloton to Cut Nearly 800 Jobs, Raise Prices [[link removed]]
Peloton
Peloton CEO Barry McCarthy wrote in a letter to employees Friday that the interactive fitness company is “making the hard choices” that will lead to the elimination of 784 jobs, a major reduction of its retail locations, and price increases for its most-expensive products.
The changes detailed in the letter obtained by Front Office Sports were the most dramatic since McCarthy, a former Spotify CFO, replaced embattled CEO John Foley in February.
Peloton will raise the price of the Bike+ by $500 (now $2,495) and the Tread by $800 ($3,495).
After a meteoric rise early in the pandemic, Peloton lost nearly $757 million in the first three months of this year, and its valuation — once at about $45 billion — has dipped 90% in less than two years.
Bloomberg [[link removed]] was the first outlet to report the letter.
Restructuring Gains Steam
The restructuring plan already included closing warehouse and retail locations as demand slowed from earlier in the pandemic.
Peloton currently has 88 stores in the U.S. and Canada. The letter stated that the company “will reduce [its] retail presence across North America, although the closures may not occur this year.” The delivery of its interactive products, which had been handled by employees, will be outsourced, which will cut delivery costs in half. Peloton will also outsource its customer service teams.The company will eliminate its North American field operations warehouse, which will result in a “significant reduction in our delivery workforce teams.”
“Any decision we make that impacts team members is not taken lightly, but these moves enable Peloton to become more efficient, cost effective, and agile,” McCarthy wrote.
Editor’s note: For more on this story, click here [[link removed]].
Carolina Panthers Submit $82M Repayment Plan for Failed HQ Project [[link removed]]
Carolina Panthers
NFL practice facilities are expensive to build — but for the Carolina Panthers, not building one is proving quite costly as well.
GT Real Estate, a company owned by Panthers owner David Tepper, submitted a plan in the U.S. Bankruptcy Court in Delaware to repay creditors and resolve all claims related to the team’s abandoned development in Rock Hill, South Carolina.
The plan would have GT Real Estate put $60.5 million into a trust dedicated to paying back contractors, subcontractors, and creditors.The company would also pay $21.1 million to York County, which provided $21 million toward the project.DT Sports Holdings, another Tepper-owned entity, has already paid $20 million toward debts related to the project.
The repayment scheme must be approved by the court, and GT Real Estate anticipates the hearing will occur in October.
The $800 million design included the team’s headquarters, practice fields, a 5,000-capacity stadium, and indoor practice center. GT Real Estate, which invested $170 million in the project, filed for bankruptcy in June.
Double Trouble
Tepper Sports & Entertainment also backed out of a similar project for its MLS team, Charlotte FC.
Last month, the organization dropped plans to be part of a public-private partnership at Charlotte’s Eastland Mall where the company would build a training facility for the club, its academy, and its MLS Next Pro team across 20 acres.
SPONSORED BY NIELSEN
Turn Team Loyalty Into Brand Loyalty
The FIFA World Cup 2022™ is a singular chance for broadcasters, platforms and brands to connect with a massive global audience.
With football being one of the most popular sports across the world’s top 10 largest economies, there is no doubt that the Word Cup presents an unparalleled opportunity [[link removed]] to engage with fans well beyond the matches. It offers a chance for the entire media ecosystem to score big with fans, and turn team loyalty into brand loyalty.
In Nielsen’s latest report [[link removed]], they showcase data and insights that helps brands, broadcasters, platforms and streamers make the most of the event. See how you can capitalize on the excitement. Download now [[link removed]].
China’s Cycling Market Projected to Reach $16.5B by 2026 [[link removed]]
Shutterstock
The world’s second-largest economy has seen a major cycling boom as pandemic-related gym closures continue and people avoid crowds.
China’s cycling market is expected [[link removed]] to reach $16.5 billion by 2026, according to Research and Markets. That’s a significant bump from last year, when the sport’s market was estimated [[link removed]] to be between $12 billion to $15 billion.
Cycling brands globally are feeling the benefits of the estimated 20 million people participating in the sport across China.
Compared to the same period last year, American bicycle brand Specialized reported 20% to 30% growth in its Beijing stores from March to June. He Dong, who oversees the Beijing franchised dealer of Specialized, says the growth would be double that number if it weren’t for a shortage of bike products. He added that for every model sold, at least 10 customers are waiting for their bike.
Feng Baozhong, vice president of the Chinese Cycling Association, expects cycling’s popularity to continue even after the pandemic, citing China’s growing affluence, the growth of the sports industry, and increased concerns about health.
“The pursuit of health will not vanish, so I think there is a good prospect for the sustainability (of cycling),” Feng said.
Around the World
Research and Markets projects the global bicycle market to reach $78 billion by 2026, up from $54.7 billion in 2020. The estimation is attributed to technological advancements, growing global health awareness, and rising fuel/energy prices, among other reasons.
The U.S. market was estimated at $9.5 billion in 2021.
Xponential Fitness Generates $60M in Q2 Revenue [[link removed]]
Xponential Fitness
Xponential Fitness — the owner of several fitness brands including Pure Barre, YogaSix, and Rumble — exceeded expectations in the company’s latest earnings report.
The largest boutique fitness franchiser in the U.S. with 2,357 studios, generated [[link removed]] $59.6 million in revenue in Q2 — a 66% increase year-over-year — surpassing [[link removed]] Wall Street estimates by 21%.
Net income reached $31.5 million in Q2, compared to a net loss of $8 million.The company sold 251 franchise licenses and opened 128 new studios in Q2.As of June 30, it had $29.3 million of cash, cash equivalents, and restricted cash.The company reported $131.7 million in total long-term debt.
Xponential has accordingly raised its full-year revenue outlook, anticipating its current state of business to maintain its pace as it continues to expand its reach.
The California-based company projects full-year revenue to range between $211 million and $221 million, up from a previous guidance of between $201 million and $211 million.
Xponential expects to open a total of 500 to 520 new studios in 2022, up 53% compared to FY2021.
Going Public
In June 2021, Xponential filed [[link removed]] for an initial public offering after a year-long delay caused by the pandemic. At the time, the company was seeking a valuation of roughly $1.3 billion.
A month later, Xponential went public raising $120 million in its IPO by selling 10 million shares for $12 apiece. The transaction also included [[link removed]] a $200 million private placement by investors.
FRONT OFFICE SPORTS PRO
The Continued Growth of Blockchain Gaming
Front Office Sports Pro [[link removed]] provides actionable, timely insights on the most promising opportunities where sports meets industry. Each month, members receive three industry reports, access to our private market deals database, industry investor directory, and weekly emails providing insights from the platform.
Our most recent report [[link removed]], the Continued Growth of Blockchain Gaming, explores:
The blockchain gaming industry grew 2,000% in the past year from Q1 2022. The first half of 2022 saw top funds in the NFT and blockchain gaming space raise a cumulative $10.5 billion in the capital. According to the Newzoo report, the Game Industry was estimated to be worth $192.7 billion by the end of 2021.
Be the most-informed member of your team with cutting-edge reports on the most tactical opportunities where sports meets industry. No jargon, no BS, no agenda.
Join today [[link removed]]!
Conversation Starters The Atlanta Dream’s rebuild [[link removed]] is bigger than basketball. The WNBA team’s new owners have made sweeping changes since taking over in 2021 — and the franchise is at the forefront of the league’s social justice initiatives. WWE is one of the best-performing sports companies trading [[link removed]] on public markets this year. Its international expansion strategy and the return to live events have been keys to its success. Tomorrow on The C-Suite, Front Office Sports’ Chief Content Officer Lisa Granatstein sits down with Jessica Berman, NWSL Commissioner, for an inside look at how she’s changing the game for women’s soccer. Tune in [[link removed]] at 2 p.m. ET for a behind-the-scenes look.*
*Sponsored Content
Today's Action
MLB
08:10 PM
Dodgers (-170) at Brewers (+145)
Bet Now [[link removed]]
MLB
03:10 PM
Tigers (+190) at Guardians (-225)
Bet Now [[link removed]]
MLB
07:05 PM
Cubs (-140) at Nationals (+120)
Bet Now [[link removed]]
*All times are EST unless otherwise noted.
*Odds/lines subject to change. T&Cs apply. See [[link removed]] for details.
Question Of The Day
Do you participate in any fantasy sports leagues?
Yes [[link removed]] No [[link removed]]
Friday’s Answer
48% of respondents drink soda at least once a week.
If this email was forwarded to you, you can subscribe here [[link removed]].
Written by A.J. Perez [[link removed]], Owen Poindexter [[link removed]], Abigail Gentrup [[link removed]], Justin Byers [[link removed]] Edited by Matthew Tabeek [[link removed]], Brian Krikorian [[link removed]]
MORE FROM FRONT OFFICE SPORTS:
The Leadoff [[link removed]] - Daily business of sports podcast
Front Office Sports Pro [[link removed]] - The most promising opportunities where sports meets industry
Front Office Sports Learning [[link removed]] - Professional education at the speed of culture
Copyright © 2022 Front Office Sports. All rights reserved.
80 Pine Street Suite 3202 New York, NY 10005
Advertise [[link removed]] / Update your preferences [link removed] / Unsubscribe [link removed]
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