Mark A. H.’s Post

⭐ '𝘉𝘜𝘠𝘐𝘕𝘎 𝘈 𝘚𝘗𝘖𝘙𝘛𝘚 𝘛𝘌𝘈𝘔 𝘐𝘚 𝘖𝘕𝘌 𝘖𝘍 𝘛𝘏𝘌 𝘞𝘈𝘠𝘚 𝘛𝘏𝘈𝘛 𝘠𝘖𝘜 𝘊𝘈𝘕 𝘎𝘌𝘛 𝘈 𝘓𝘌𝘎𝘈𝘓 𝘔𝘖𝘕𝘖𝘗𝘖𝘓𝘠' ⭐ (Ian Charles, Arctos Sports Partners, 2023) Arctos Sports Partners is the new 'Blackstone' of sports ($ 2.1bn AuM!) and invested in Liverpool Football Club, Golden State Warriors, Paris Saint-Germain, and many more global sports franchises. Who is behind this success and what is Arctos' strategy? 𝐈) 𝐁𝐚𝐜𝐤𝐠𝐫𝐨𝐮𝐧𝐝: Arctos was founded by Ian Charles, a former Landmark Partners executive, and David O'Connor, ex-CEO of Madison Square Garden Company. With $2.1 billion, the inaugural fund was the 𝐥𝐚𝐫𝐠𝐞𝐬𝐭 𝐟𝐢𝐫𝐬𝐭-𝐭𝐢𝐦𝐞 𝐟𝐮𝐧𝐝 𝐢𝐧 𝐏𝐫𝐢𝐯𝐚𝐭𝐞 𝐄𝐪𝐮𝐢𝐭𝐲 𝐡𝐢𝐬𝐭𝐨𝐫𝐲. Arctos' strategy is focused on long-dated minority stakes in professional sports franchises, providing both growth capital and liquidity solutions to owners. The Dallas-based firm has 𝐧𝐨𝐰 𝐦𝐨𝐫𝐞 𝐭𝐡𝐚𝐧 >$6 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 𝐢𝐧 𝐚𝐬𝐬𝐞𝐭𝐬 (mainly through value appreciation, no exits). 𝐈𝐈) 𝐒𝐩𝐨𝐫𝐭𝐬 𝐅𝐨𝐜𝐮𝐬: Arctos is the first firm with such an exclusive focus on sports investments. The firm has already closed more than 15 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭𝐬 including The Golden State Warriors, Sacramento Kings, Fenway Sports Group (owner of Liverpool FC and Boston Red Sox), and Paris Saint-Germain. Sports franchises are becoming an increasingly attractive asset class for institutional investors. 𝐈𝐈𝐈) 𝐁𝐮𝐭 𝐰𝐡𝐚𝐭 𝐝𝐫𝐢𝐯𝐞𝐬 𝐭𝐡𝐢𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫 𝐚𝐩𝐩𝐞𝐭𝐢𝐭𝐞? 💰 𝐎𝐧𝐥𝐲 𝐫𝐞𝐜𝐞𝐧𝐭𝐥𝐲 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬 𝐰𝐞𝐫𝐞 𝐚𝐥𝐥𝐨𝐰𝐞𝐝 𝐢𝐧 𝐦𝐚𝐣𝐨𝐫 𝐔𝐒 𝐥𝐞𝐚𝐠𝐮𝐞𝐬: The key development in sports ownership took place over 2019-2021. Four North American leagues - MLB, MLS, NBA, and NHL - changed their rules to allow funds to buy minority interests in one or more teams. 🤩 𝐇𝐮𝐠𝐞 𝐯𝐚𝐥𝐮𝐞 𝐚𝐩𝐩𝐫𝐞𝐜𝐢𝐚𝐭𝐢𝐨𝐧 𝐢𝐧 𝐫𝐞𝐜𝐞𝐧𝐭 𝐝𝐞𝐜𝐚𝐝𝐞𝐬: - Dallas Cowboys from $1.83bn (2010) to $9bn in 2023 - Chelsea Football Club from $140mn (2003) to $5.3bn in 2022 - LA Clippers from $2bn in 2014 to $4.7bn in 2023 𝘕𝘰𝘵𝘦: 𝘖𝘧 𝘤𝘰𝘶𝘳𝘴𝘦 𝘰𝘸𝘯𝘦𝘳𝘴 𝘢𝘭𝘴𝘰 𝘪𝘯𝘷𝘦𝘴𝘵𝘦𝘥 𝘪𝘯 𝘤𝘭𝘶𝘣𝘴 𝘸𝘩𝘪𝘭𝘦 𝘰𝘸𝘯𝘪𝘯𝘨 𝘵𝘩𝘦𝘮 𝘣𝘶𝘵 𝘰𝘷𝘦𝘳𝘢𝘭𝘭 𝘷𝘢𝘭𝘶𝘦 𝘢𝘱𝘱𝘳𝘦𝘤𝘪𝘢𝘵𝘪𝘰𝘯 𝘰𝘶𝘵𝘸𝘦𝘪𝘨𝘩𝘴 𝘵𝘩𝘪𝘴 𝘪𝘯 𝘢𝘭𝘭 𝘤𝘢𝘴𝘦𝘴 🏟 𝐒𝐩𝐨𝐫𝐭𝐬 𝐟𝐫𝐚𝐧𝐜𝐡𝐢𝐬𝐞𝐬 𝐚𝐬 𝐚𝐥𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐯𝐞/𝐮𝐧𝐜𝐨𝐫𝐫𝐞𝐥𝐚𝐭𝐞𝐝 𝐚𝐬𝐬𝐞𝐭 𝐜𝐥𝐚𝐬𝐬: - Stable cash flows from media rights deals - Deep loyalty to the teams - Scarcity of premium sports assets 🌎 𝐓𝐡𝐞 𝐦𝐚𝐫𝐤𝐞𝐭 𝐨𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐲 𝐢𝐬 𝐚𝐥𝐬𝐨 𝐯𝐞𝐫𝐲 𝐥𝐚𝐫𝐠𝐞: - $400 billion TAM around sports teams - $150 billion TAM around leagues - $30 billion TAM around adjacencies and emerging properties PE interest in sports assets will continue to increase with more dedicated firms like Arctos likely to emerge. Follow me (Mark A. H.) for more breakdowns like this. Behind the Athletes Podcast, Moritz Gessl #sportsbusiness

"How does a non-winning team manage to become the most liked, most hated, and most profitable team in the world?" 🤔💸 I grew up in Virginia in a family of Redskins fans and was taught to hate the Cowboys from a young age. 🤣 I never understood how the Cowboys were so popular amongst my friends in the DC metro area when the Redskins were our hometown team. 🏈 Love them or hate them, the Cowboys are the most profitable football team in NFL history (and arguably the world), with a staggering valuation exceeding $9 billion. 💰🌟This is a fascinating read and an excellent case study in building a product as an entertainment brand. "The typical business strategy is product first: develop a new product or service, and then craft marketing around it. Entertainment brands are story-first. They spend time building an audience, crafting spectacle that audiences can’t help but follow. Then, they monetize that audience via sponsorship and new products." What lessons can we take from the Cowboys' approach to branding and business? 🤔✨ #marketing #brandstrategy

⚽️ Even More Celebrity Investment in Soccer Teams While Ryan Reynolds and Rob McElhenney weren't the first ever celebrity investors into a soccer team, their investment in Wrexham AFC has made the pair the prototypical celebrity investors in a soccer team. Wrexham has become "Hollywood's Team" and is considered a template for what many other influencers are trying to replicate--across different sports, different geographies, and different levels. Ryan and Rob are basically thought leaders when it comes to celebrities getting into the sports business and now they've bought a stake in Mexican soccer club Necaxa. Alongside other celebrity investors like Eva Longoria, Ryan and Rob have the opportunity to build another success story like Wrexham. Two interesting factors here are A) the role of content and B) the choice of geography. A large part of Wrexham's success has come from their FX series "Welcome to Wrexham," and and overall focus on creating relevant social media content. Will they employ a similarly aggressive content strategy for Club Necaxa, maybe even creating a docuseries about the club? And in the very global world of soccer, Ryan and Rob have strategically decided to pick a team in Mexico as their next focus. With the World Cup being hosted across Mexico, Canada, and the US in 2026 and Liga MX as the most watched soccer league in America, buying a team in Mexico makes a lot more sense vs. buying a soccer team in many other countries. More influencers will be investing in more sports teams and on an international scale, influencer-sports tea fit will be an important factor to ensure successful investments. https://lnkd.in/e3uS_vqR #football #soccer #sportsinvestment #sports #sport #media #entertainment #sportsbusiness #celebrity #influencer

From The Economist: New leagues are not just storming the field in America. They are a global phenomenon, with the exception of China, where professional sport has struggled in recent years, with a major corruption scandal rocking football. The Kings League, for football, was founded in Spain in 2022, has expanded to Latin America and will soon launch in Italy. That same year investors launched a baseball team in the United Arab Emirates, which aims for sport to account for 0.5% of its GDP by 2031. Saudi Arabia is spending billions on sports and founded LIV Golf, a tour that includes teams in what is usually a solo game; next the country will reportedly invest as much as $2bn in a professional boxing league. Investors are rooting for many of the upstart leagues, and it is not hard to understand why. Teams have appreciated handsomely over the past few decades in America, with valuations outperforming the S&P 500. A #sports franchise also offers diversified income streams, with revenue from broadcast deals, sponsorship, ticket sales and merchandise. Traditional teams are few and expensive, especially since private-equity firms and sovereign-wealth funds have got in the game in recent years; startup leagues are cheaper, but still come with bragging rights for wealthy owners. A professional baseball squad costs about a hundred times more than a bull-riding outfit, but a PBR Teams event can have as many viewers as some baseball teams, according to Marc Lasry of Avenue Capital Group, a hedge fund that owns the New York Mavericks and has invested in SailGP and pickleball. “There’s a huge arbitrage there,” he insists. Rapidly appreciating #media rights have boosted the value of teams and given an assist to new leagues. In a business full of uncertainty, sports enthusiasts are probably the biggest fans of live #entertainment. Broadcasters are paying ever more for the privilege of distributing it to them. The entry of streamers like Amazon Prime Video, Apple TV + and Netflix into the scrum has further pushed up prices for sports rights. Once leagues had to compete for limited airtime; now there is a platform for everyone and everything. I don’t think this would have happened 20 years ago without the advances in #technology. There’s just more eyeballs out there,” says Mike Keenan, who runs the sport practice for PwC Intense fan culture, which has swept the world of entertainment writ large, has given new teams a boost. So strong is appetite for watching #sport that viewers want to turn on shows about athletes even when they are off the pitch. PBR was the subject of Netflix and Amazon series. Next year Brad Pitt will star in a #film about Formula 1, which has already featured in a hit documentary series on Netflix. In other words, there are more ways than ever to find fans—and to be one. That does not mean that a golden age for leagues will translate into gold for everyone. “Historically there is a lot of roadkill in this space” #TV #streaming

The future potential of ⚽️ in the United States is significant, driven by a combination of growing interest, financial investment, and strategic development at various levels of the sport. The #MLS and other leagues are increasingly tapping into a market that has traditionally been more focused on other sports, like 🏈, 🏀 and ⚾️. Here’s an analysis of the benefits: Future Potential 1. Growing Popularity and Fan Engagement: ⚽️popularity in the US has been steadily increasing, particularly among younger generations who are more likely to follow the sport globally. This growing fanbase provides a solid foundation for the future. 2. Expansion and Investment: The willingness of investors to pay significant expansion fees to join MLS indicates confidence in the league’s future growth. With the league set to expand to 32 teams, including potential markets like Las Vegas and Indianapolis, the footprint of professional ⚽️ in the US is expanding rapidly. 3. Youth Development and Infrastructure: With the development of youth academies and MLS NEXT Pro, the 🇺🇸is building a pipeline for developing homegrown talent. This is crucial for creating a competitive national team and fostering a strong domestic league. 4. International Exposure: Hosting events like the FIFA World Cup 2026™ - Canada, Mexico and the United States will further boost soccer’s profile in the US and attract more global attention, increasing sponsorship opportunities and fan interest. Benefits of the Franchise League System 1. 💰: The franchise model ensures financial stability by controlling the number of teams and maintaining a high level of investment. This prevents the boom-and-bust cycles seen in some other sports leagues. 2. Controlled Expansion: By carefully vetting potential new teams through a rigorous application process, MLS can ensure that only financially viable and strategically located teams join the league. This helps maintain competitive balance and avoid overextension. 3. Revenue Sharing: The franchise model allows for a more equal distribution of revenues from TV deals, sponsorships, and merchandising, which can help smaller market teams remain competitive. 4. Marketing and Branding: Centralized control allows MLS to manage the league’s brand effectively, leading to more consistent marketing efforts and better promotion of the sport across the country. The future of soccer in the 🇺🇸 is brimming with opportunities, especially in the wake of the 2026 FIFA World cup, which is expected to ignite a new wave of enthusiasm for the sport across the country. The increasing popularity of ⚽️ among younger generations, coupled with significant financial investments and strategic expansion efforts by leagues like MLS, positions the US as a growing soccer powerhouse. Will MLS clubs be able to compete with European clubs in a formal competition or league in the future?

Insightful and must-read report - A Piece of the Action: Investing in #ProfessionalSports Leagues and Related Businesses - courtesy of Michael Cembalest, Chairman of Market and Investment Strategy for J.P. Morgan Asset Management. Cembalest provides expert analysis re: 🔹#privateequity in sport 🔹Media streaming and the decline of regional sports networks (#RSN) 🔹Fan attendance and ticketing 🔹Why league #parity benefits owners of teams in US vs EU/UK (*notable) 🔹EU/UK ⚽ #relegation / rising player salaries and new regulations (e.g. #PSR) 🔹Emerging sports - e.g. Formula 1, Major League Soccer, Bull Riding, etc.) 🔹Stadiums 🔹Adjacent businesses - Apparel, #imagerights, and #playermanagement 🔹#Sportsbetting 🔹US sports leagues - #antitrust | #anticompetitive considerations 🔹Worst team money can buy - #roi 🔹Best basketball 🏀 players of all-time (happy to see friend and legal client George Gervin referenced) Several takeaways: 🔹Pro athletes owe taxes in every jurisdiction where they work, but the bulk of their salary is taxed at the rate of their home state (e.g. a $3m National Hockey League (NHL) contract: state taxes in Texas $0, California $371k) 🔹Global sports #media contracts were worth $24.5 billion in 2011 and are worth $62.4b+ today (per Forbes) 🔹Over 30% of adults in the US and UK have purchased at least one pay-per-view sports event in the last 12 months, mostly Ultimate Fighting Championship (#UFC) and #boxing (boxing makes up 4/5 most watched PPV events of all time) 🔹In 2023, the National Football League (NFL) accounted for 93 of the 100 most-watched TV broadcasts, up from 82 in 2022 and 61 in 2018 (per Sportico & Nielsen data) 🔹Traditional cable subscriptions are declining as a share of consumed content, particularly among people aged 18-29; in this age group only 31% have cable TV, down from 64% in 2015 🔹In the NFL, NBA and NHL, 97%+ of available seats were sold in the most recent season (MLB has been the exception with ~70% of seats sold for the average game) 🔹A notable aspect of US sports leagues is parity, particularly compared to European soccer 🔹A primary driver of sports parity is #revenuesharing 🔹English Premier League (#EPL) salaries have increased by 36x from 1992-2021 (league revenues only increased by 27x). Total wages as a share of revenue are 73% for the average EPL team; outside the top 6 teams, this figure is even higher at 87% 🔹Only 7 EPL teams reported a profit in the 2021-2022 season (roughly 1/3 of the league) 🔹#taxevasion is now grounds for automatic disqualification for owning/running an EPL team 🔹In 2019, the EU added football to its #moneylaundering watchlist 🔹Revenue generated by #womensprosports leagues will surpass $1b for the first time in 2024 (per Deloitte) 🔹Online #sportsbetting revenues now represent 18% of all commercial gaming revenues and US bettors are spending (e.g. losing) $700 million to $1 billion per month #sportslaw #sportsfinance | Quintel Intelligence

🚨 Important News in the World of Sports 🚨 Bob Iger and Willow Bay have acquired Angel City FC, marking a significant milestone in the women’s football industry. This agreement for the Los Angeles-based Football Club represents the highest valuation ever for a professional women’s team, highlighting the growing popularity and impact of women’s sports globally. ACFC become the world's most valuable women's professional sports team. This acquisition not only reinforces the commitment to the growth of the sport but also opens new opportunities for the development and visibility of women’s football. It is a testament to the power and potential of women’s sports and a step forward towards the equality and recognition that female athletes deserve. Moreover, this move consolidates the concept of #Sportainment, where sports and entertainment merge to create unique and engaging experiences for fans. Bob Iger and Willow Bay, known for their leadership at The Walt Disney Company, bring a wealth of experience and vision that promises to transform the landscape of women’s football. 🔗 Read more about this news here: https://lnkd.in/et-wz_3m #WomensFootball #Sports #Investments #Leadership #Equality #Sportainment

#PeakSports: Don't fall for the banana in the tailpipe. There's a scene in Beverly Hills Cops when Eddie Murphy puts bananas in the tailpipe of a cop car. When he takes off, the cops try to follow him, but their car stalls out because the bananas are blocking the exhaust. What does this have to do with sports? The Phoenix Suns owner: sold. The Dallas Mavericks owner: sold. The Boston Celtics owner: selling. Their reasoning for selling, as we're being told, is that they're selling for off-court reasons, whether it be estate planning, or in the case of the Suns, having your hand forced. While those are valid reasons and contribute to deciding to sell, don't let those excuses block you from going after the real story. The truth, as I see it, is that these owners don't foresee as much upside for their franchises as they've seen in the past. If you're the Celtics owner, you don't sell the team after winning a championship if you think your team's value will triple in the next decade. You can do your estate planning in 10 years, and I'm sure planning will be a lot better when your team is worth $15b vs. the $5b it's worth today. Unless...your team won't be worth $15b in 10 years? Clearly, these 3 franchises who sold (or are selling) don't believe their teams' value will continue to skyrocket. All of these sales happening at the time the TV rights licensing fees were being projected is not a coincidence. The owners all knew what future NBA revenues would look like, and they decided to get out on these sky-high revenue numbers while they could. And they're (financially) smart to do it. Sports is pretty much saying goodbye to revenues from RSNs. The MVPD market from which they've extracted fees is falling apart. And deals with streamers are wholly reliant upon companies that absolutely do not need sports and are *currently* okay with losing money on them. Listen, in the next decade, there may be new ways for the NBA to make more money. But when it comes to straight-up TV licensing rights, there is no reason to believe these deals will increase in value. And these franchise sales suggest these owners don't foresee it happening either. Honestly, if ESPN, the premier sports destination in the world, is seeing its revenue flatline, how can the NBA's revenue go up forever? Much like newspapers, radio stations, and now cable TV channels saw better days, sports—which have largely grown due to the cable bundle–has likely seen its best revenue growth days, too. The U.S. population is aging and flatlining. Younger viewers barely like sports. And the fight for attention is growing both digitally and in real life. So when the next NBA franchise goes up for sale, avoid the banana in the tailpipe and skip past the part where they tell you it's for family planning purposes. Instead, look at the revenue and where it's going. That will tell you all you need to know about their decision to sell, and where we're at in the world of sports.

What brand is patch perfect for the VGK road jerseys?🏒🧵 I’m beyond excited to announce that the Vegas Golden Knights have launched a campaign to find the perfect road jersey patch partner! This opportunity isn’t just about visibility—it’s about teaming up with an elite brand that will travel coast-to-coast with us, front and center, all season long. So, how are we pitching it? With a shock-and-awe campaign—sending out custom boxes featuring authentic Golden Knights jerseys with branded company patch stitched on the front and audio clips from our 2023 Stanley Cup win 🏆. Campaigns like this are special—it’s where creativity meets impact. A jersey patch is a powerful asset, showcased across national broadcasts and in front of passionate fan bases in every NHL city we visit. I’ve got a few ideas of my own, but I’d love your input: ⚡️ Which brand would look incredible on our road jerseys? ⚡️ Who should I send one of these exclusive VGK boxes to? Drop your thoughts in the comments or DM me directly—I’d love to hear your ideas! And if we close this deal with one of your suggestions, rest assured, there’s a big shoutout coming your way. 😉 #VegasBorn #GoldenKnights #JerseyPatch #MarketingInnovation #SportsSponsorship