As dealmakers look to find value-add niches that can withstand questionable market conditions, firms are finding themselves drawn to the sports world. Private equity funds have begun flooding into the professional sports minority ownership as the asset class has proven resilience through troubled times. With immense scarcity in professional sports themselves, Brand Velocity Group has built a platform to invest alongside the wide world of sports.
Brand Velocity Group has launched Brand Velocity Group Sports, a sports-focused vertical that will target firms in sports-adjacent categories. The firm hopes to accelerate brand growth, provide financial flexibility and drive economic impact for its stakeholders. Despite the scarcity of professional sports organizations, the firm will still explore opportunities in the sector.
The influx of private equity funds into professional sports organizations has created opportunities for BVG’s Vertical. “It has had a positive knock-on effect in both in legacy channels (apparel, equipment, agencies, etc.) and emerging ones (media, gaming, technology, etc.),” says Drew Sheinman, founding partner at BVG. “PE investors have come to view sports as a recession-resistant asset class that continues to grow. There are lots of tailwinds across the board.”
The firm has developed a laundry list of operating partners that have driven billions of dollars of economic impact in their careers to support the new vertical. BVG closed its first deal in the industry in September when it acquired Score Sports alongside the firm’s new partner Eli Manning.
While Score is technically separate from the BVG’s initiative, it checks all the criteria the firm is looking for as a sports-adjacent category; offering an established differentiated, best-in-class product or service, over $10 million in Ebitda, consistent growth and reoccurring revenue and opportunity to deploy growth capital to take advantage of upside.
“Sports has become a bona fide asset class,” says Sheinman. “It has proven to be a recession-resistant asset class over many cycles, and it’s still wide open in terms of opportunity, both in legacy and emerging categories.”
Have you spotted any emerging sports-adjacent firms recently? Let me know at [email protected].
–Cole Lipsky
