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New owner structure for Legends
Published November 19, 2012, Page 1
Gerry Cardinale, managing director in merchant banking for Goldman Sachs who originally brought the New York Yankees and Dallas Cowboys together to form Legends, is leaving Goldman at the end of this year.
With Cardinale’s exit, “there was no reason anymore for Goldman to stay involved,” said Dave Checketts, Legends’ chairman and CEO. “Gerry was the sponsor, the inspiration; he had the confidence of the Cowboys and Yankees, so the current shareholders bought them out.”
The new ownership structure, completed last month, is now split between the Cowboys, Yankees and the Checketts Partners Investment Fund, a $50 million fund, which has stepped up and increased its share of Legends. The two major league teams still own majority and equal shares. The Checketts fund has increased its share from the 16 percent stake it acquired in January after Dave Checketts was named to Legends’ top post. At that time, the Checketts fund bought out CIC Partners after Mike Rawlings, Legends’ ex-president and a CIC principal, was elected mayor of Dallas.
Cardinale could not be reached for comment.
The moves come as Checketts continues to try to expand Legends’ business, which covers a vast scope of services for major league and college teams and their facilities. Its business lines include food and retail concessions, the marketing of arenas and stadiums tied to premium-seat sales and naming rights, ticket-sales consulting and training, and CRM installations.
Last year, Legends’ revenue exceeded $200 million, company officials said. That number should increase substantially in 2013 after Legends signed sales and marketing deals with a number of sports properties. Checketts said the company could add additional investors in the new year, and he remains bullish on the company’s growth prospects.
“For now, we’re very happy with where we are,” Checketts said. “The company is nimble, it has capital, and we have like-minded investors across the business, both the investors in my company and our shareholders.”
One year ago, Legends got a major boost after it purchased CSL International and CSL Marketing Group, two Dallas firms specializing in the research and marketing of sports facilities. The merger positioned Legends as a dominant player in the development of arenas and stadiums.
Since its launch four years ago, the company’s sales division has grown to a point where it sells season tickets for several major college football and basketball teams and premium seats for iconic facilities such as Rose Bowl Stadium and Churchill Downs.
Legends also is responsible for selling suites for the Circuit of the Americas in Austin, Texas, which had its first Formula One race last weekend.
In the NFL, its sales business under Chad Estis, president of Legends Premium Sales, has expanded from the development of Cowboys Stadium to the Bay Area, where Legends Premium Sales is marketing the San Francisco 49ers’ new stadium under construction in Santa Clara. In Jacksonville, Legends has been assisting the Jaguars with season-ticket sales.
The company also has had talks with the Minnesota Vikings about selling premium seats at their planned $975 million stadium, but no deal has been signed.
“We’re hopeful that we get a chance there,” Checketts said.
While its ticket sales division has seen traction, Legends’ hospitality operation, the business on which the company was founded, has struggled to expand beyond its initial food and merchandise accounts at Cowboys Stadium and Yankee Stadium. It did land food deals with MLS’s FC Dallas and about a half-dozen minor league ballparks, three of them home to Yankees’ farm clubs, but it has not made inroads with other major league accounts.
At the college level, Legends is expected to compete for Ohio State’s sports food business as the Big Ten school starts accepting proposals, said Xen Riggs, OSU’s associate vice president for student life.
Now, with Checketts firmly at the helm of New York-based Legends and with his fund having more skin in the game, industry observers see growth potential for the company on all fronts.
Checketts’ strong ties to the major leagues as owner of the St. Louis Blues and Real Salt Lake, in addition to his past tenure as president of the New York Knicks and Madison Square Garden, will serve Legends well as the company pursues new business, said veteran sports executive Harvey Schiller, former chairman and CEO of YankeeNets, the precursor to YES Network.
“The relationships Dave has are singular in terms of his experience,” Schiller said. “He is a brand to himself.”
Cardinale will stay involved with Legends as an independent director on the company’s board, Checketts said.
Goldman Sachs’ cutting ties with Legends comes at a time when the investment bank is close to divesting itself from YES Network. Cardinale helped create the regional sports network in 2002, five years before proposing the Cowboys-Yankees joint venture to Cowboys owner Jerry Jones during a 2007 trip in the Caribbean. In July 2011, Cardinale approached Checketts about strategies for expanding Legends. That ultimately led to Checketts joining the company.
“We’re very excited about the opportunities that are in front of us, the ones that we’ve dug up and the ones that people are coming to us with,” Checketts said. “We’ll have a lot to talk about in the new year.”