Key Takeaways
- • Private equity interest in sports now spans events, agencies, technology, media, youth sports and consumer products, but few independent sports businesses generate at least $10 million of EBITDA, pushing competition for scaled platforms to premium valuations, according to guest columnist Chris Russo, CEO of Fifth Generation Sports.
- • Russo argues sponsors should start with a $3 million to $5 million EBITDA anchor company and build a platform around it, accepting higher management, systems and add-on execution risk.
- • Sports products, sports-related real estate, non-sports businesses adding a sports vertical, international companies and small- and mid-cap public companies are presented as less crowded routes into the sector.
- • Russo cites Crestview's Gersh Agency and Gersh Sports, Bruin Capital's Deltatre, and the 2021 take-private of Collectors Universe as examples of these alternative approaches.
Summary
Private equity interest in sports now extends well beyond professional team ownership to events, agencies, technology, media, youth sports and consumer products. Chris Russo, CEO of Fifth Generation Sports, writes in a guest column that firms seeking exposure to the broader sports ecosystem repeatedly encounter a shortage of independent sports businesses with at least $10 million of EBITDA. When a scaled company does come to market, competition is intense and valuations reach premium levels. Sponsors therefore face a choice between continuing to compete for a small group of obvious platforms or adopting a broader approach to building scale.
The most direct alternative, Russo argues, is to acquire a $3 million to $5 million EBITDA anchor company and build around it. He acknowledges the drawbacks: smaller businesses may have thinner management, less sophisticated systems and greater customer or founder concentration, and the sponsor bears the risk that planned add-ons fail to close. Fund size can also make small anchor investments inefficient for many firms, so he views this approach as suitable for selected funds only.
Russo also contends that sponsors concentrating on recurring revenue, low capital expenditure and asset-light services crowd into the same set of companies. Sports products and sports-related real estate can offer a less contested route, although manufacturing, inventory, working capital and capital expenditure requirements can deter generalist investors. He cites Unrivaled Sports, launched in 2024 by Josh Harris and David Blitzer with investment from The Chernin Group, which combined Ripken Baseball, Cooperstown All Star Village, Sports Force Parks and Baseball Factory into a participation business anchored by physical facilities. Separately, he describes acquiring established businesses outside sports, such as marketing, experiential or professional-services firms, and adding sports leadership and commercial introductions. As an example, Crestview Partners invested in The Gersh Agency in 2023 and in December 2024 Gersh acquired You First, a global sports representation and marketing agency, launching Gersh Sports.
Russo further recommends searching internationally, noting that attractive sports businesses may be based in Europe, Canada, Australia, Latin America or Asia, and that cross-border deals bring regulatory, tax, currency and cultural complexity. He cites Bruin Capital's 2016 acquisition of Italy-based Deltatre, which then expanded into the Americas and signed commercial deals with MLB, MLS and the NFL, and which Bruin sold to Bain Capital in 2022. He also argues that small- and mid-cap public sports companies, often lightly covered by analysts, can be taken private. His example is the 2021 take-private of Collectors Universe, parent of grading business PSA, by an investor group led by Nat Turner, D1 Capital Partners and Steve Cohen's Cohen Private Ventures at an $853 million equity value; the company later announced a $100M capital raise at a $4.3 billion valuation in 2022.
Russo concludes that $10 million EBITDA sports businesses are likely to remain scarce in the near term, and that the opportunity set extends to smaller growth platforms, product and facility businesses with untapped service revenue, adjacent companies, and overlooked international or public companies. He frames the central question as shifting from where to find a $10 million EBITDA business to which business can be built into the next valuable sports platform. Russo is also CEO of Fifth Generation Sports, a boutique advisory firm focused on middle-market sports transactions, and previously was a managing director at Houlihan Lokey and ran the NFL's digital media group.
The most direct alternative, Russo argues, is to acquire a $3 million to $5 million EBITDA anchor company and build around it. He acknowledges the drawbacks: smaller businesses may have thinner management, less sophisticated systems and greater customer or founder concentration, and the sponsor bears the risk that planned add-ons fail to close. Fund size can also make small anchor investments inefficient for many firms, so he views this approach as suitable for selected funds only.
Russo also contends that sponsors concentrating on recurring revenue, low capital expenditure and asset-light services crowd into the same set of companies. Sports products and sports-related real estate can offer a less contested route, although manufacturing, inventory, working capital and capital expenditure requirements can deter generalist investors. He cites Unrivaled Sports, launched in 2024 by Josh Harris and David Blitzer with investment from The Chernin Group, which combined Ripken Baseball, Cooperstown All Star Village, Sports Force Parks and Baseball Factory into a participation business anchored by physical facilities. Separately, he describes acquiring established businesses outside sports, such as marketing, experiential or professional-services firms, and adding sports leadership and commercial introductions. As an example, Crestview Partners invested in The Gersh Agency in 2023 and in December 2024 Gersh acquired You First, a global sports representation and marketing agency, launching Gersh Sports.
Russo further recommends searching internationally, noting that attractive sports businesses may be based in Europe, Canada, Australia, Latin America or Asia, and that cross-border deals bring regulatory, tax, currency and cultural complexity. He cites Bruin Capital's 2016 acquisition of Italy-based Deltatre, which then expanded into the Americas and signed commercial deals with MLB, MLS and the NFL, and which Bruin sold to Bain Capital in 2022. He also argues that small- and mid-cap public sports companies, often lightly covered by analysts, can be taken private. His example is the 2021 take-private of Collectors Universe, parent of grading business PSA, by an investor group led by Nat Turner, D1 Capital Partners and Steve Cohen's Cohen Private Ventures at an $853 million equity value; the company later announced a $100M capital raise at a $4.3 billion valuation in 2022.
Russo concludes that $10 million EBITDA sports businesses are likely to remain scarce in the near term, and that the opportunity set extends to smaller growth platforms, product and facility businesses with untapped service revenue, adjacent companies, and overlooked international or public companies. He frames the central question as shifting from where to find a $10 million EBITDA business to which business can be built into the next valuable sports platform. Russo is also CEO of Fifth Generation Sports, a boutique advisory firm focused on middle-market sports transactions, and previously was a managing director at Houlihan Lokey and ran the NFL's digital media group.
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