Menu
Leagues and Governing Bodies

NFL licenses firm to market experiences

Bruin and RedBird starting sports hospitality company

Two new business partners — Bruin Sports Capital and RedBird Capital Partners — are forming a sports hospitality firm that will market and sell exclusive NFL access and experiences to the league’s marquee events.

The NFL not only is issuing Bruin and RedBird a 10-year license for those events, but the league also will be a partner in the new company.

It’s common for the NFL to issue product licenses for items such as hats and apparel, but this is the first time it has licensed experiences associated with its events. That kind of exclusive access at the Super Bowl, Pro Bowl or NFL draft was available only through a unit known as NFL On Location in the past.

The new hospitality firm will work with the league to create access and assets that aren’t available anywhere else.

Bruin and RedBird will own equal shares in the new hospitality business, but the companies did not say how the ownership percentages break down. They are calling the new company NewCo for now until a formal name is selected.

SEE ALSO:

“We are recapitalizing it as a stand-alone business. This NewCo will be partly owned by the NFL, together with RedBird and Bruin, as well as [be] a licensee of the NFL,” said Gerry Cardinale, RedBird’s founder and formerly co-head of private equity at Goldman Sachs. “Consistent with our investment thesis, we expect that NewCo will eventually become a larger global platform business, creating and delivering premium live event and hospitality fan experiences in partnership with other rights holders in sports and entertainment.”

The high-margin hospitality unit does about $20 million annually in revenue by packaging experiential trips to the NFL’s big events, sources said, suggesting that amount as the starting point for the annual cost of the license. In addition to the Super Bowl, Pro Bowl and NFL draft, the featured events could include regular-season games played overseas, the Hall of Fame preseason game and any other new events.

Bruin and RedBird will look to expand the business into other sports, as well.

NewCo is the first deal for Bruin, formed in January by former IMG Sports & Entertainment President George Pyne. Bruin, an operating company capitalized by WPP and a handful of wealthy families, will run the new hospitality firm, a job for which Pyne appears well suited after long stints with IMG and NASCAR, where he was the sanctioning body’s chief operating officer.

A branding firm will be retained shortly to name the larger company, but the new name will not have the NFL in it. The NFL On Location name will remain as a product line.

“I can’t wait until we can see what we can do with the Pro Bowl and the international games,” said Pyne, who launched 3-month-old Bruin with $250 million in assets, about 35 percent to 40 percent of which came from WPP.

Cardinale said the creation of the new hospitality firm bore many similarities to the formation of the YES Network, which he had a hand in as well. Cardinale pointed to YES as a model for this deal because the New York Yankees invested in the deal with two private equity funds. The Yankees then licensed the broadcast rights to YES.

Cardinale also worked with the Yankees and Dallas Cowboys to form the joint venture Legends Hospitality Management.

While NFL On Location is an existing business, the concept is the same: The NFL is licensing a business to a company it partially owns.

The NFL created On Location a decade ago to capture hospitality business from companies that were profiting off the league’s own events. And it succeeded in so doing, but investing further in the business was stymied, sources said, by the NFL’s collective-bargaining agreement. The labor pact constrained the league because it could not divert revenue for investment because that money is shared with the players. (While the CBA does contain revenue carve-outs for things like a possible stadium in Los Angeles, it does not have a carve-out for On Location).

Asked if the new arrangement posed any labor issues, league executive Kevin LaForce said it does not because the deal provides licensing revenue that is shared with players. “What we are doing is repositioning it as an owned-and-operated business to a licensing business,” LaForce said. “That is the vast majority of what we do at the NFL.”

The NFL decided nine months ago to examine the On Location model because of the limited growth chances, said LaForce, NFL vice president of corporate development. There was a lot of interest in the market, he said, but Bruin and RedBird stood out for their offer to partner, rather than acquire, the On Location unit.

As part of the contract, the NFL commits to the new company a designated number of tickets as well as points of access, such as access to players and on-field access. By keeping the NFL as an equity investor, the financiers hope the league will have an additional financial incentive to extend the license and grant access.

SBJ Morning Buzzcast: March 18, 2024

Sports Business Awards nominees unveiled; NWSL's historic opening weekend and takeaways from CFP deal

ESPN’s Jay Bilas, BTN’s Meghan McKeown, and a deep dive into AppleTV+’s The Dynasty

On this week’s Sports Media Podcast from the New York Post and Sports Business Journal, ESPN’s Jay Bilas talks all things NCAA. Big Ten Network’s Meghan McKeown shares her insight into the Caitlin Clark craze. The Boston Globe’s Chad Finn chats all things Bean Town. And SBJ’s Xavier Hunter drops in to share his findings on how the NWSL is making a social media push.

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBJ I Factor: Nana-Yaw Asamoah

SBJ I Factor features an interview with AMB Sports and Entertainment Chief Commercial Office Nana-Yaw Asamoah. Asamoah, who moved over to AMBSE last year after 14 years at the NFL, talks with SBJ’s Ben Fischer about how his role model parents and older sisters pushed him to shrive, how the power of lifelong learning fuels successful people, and why AMBSE was an opportunity he could not pass up. Asamoah is 2021 SBJ Forty Under 40 honoree. SBJ I Factor is a monthly podcast offering interviews with sports executives who have been recipients of one of the magazine’s awards.

Shareable URL copied to clipboard!

https://www.sportsbusinessjournal.com/Journal/Issues/2015/03/30/Leagues-and-Governing-Bodies/NFL-Bruin-RedBird.aspx

Sorry, something went wrong with the copy but here is the link for you.

https://www.sportsbusinessjournal.com/Journal/Issues/2015/03/30/Leagues-and-Governing-Bodies/NFL-Bruin-RedBird.aspx

CLOSE