The NFL owns a small equity piece of collegiate marketer Learfield Sports, a stake the pro league quietly acquired when fund giant Providence Equity Partners bought the agency’s parent company for around $500 million almost two years ago.
The league’s share came through the NFL’s partnership with Providence and is the first publicly known case of the two investing jointly. While it remains the only public investment of a partnership that began in March 2013, the NFL has since made three significant investments on its own, signaling that the league is not wed to investing only though Providence.
The NFL’s stake in Learfield is small, about 2 percent, and does not include a board seat. That said, it has brought the NFL and the marketer in closer contact, allowing them to share ideas on areas such as stadium connectivity, fan engagement and in-stadium signage.
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Mississippi State is among Learfield’s more than 90 college clients.
Photo by: GETTY IMAGES
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“It’s really just opportunistic,” said Learfield CEO Greg Brown. “If there’s anything they’re working on that might have an application for us, they might place a courtesy call and ask if it’s something that would be helpful. We haven’t really done anything together yet.”
Both the NFL and Providence declined to comment.
Brown said the NFL has informally started sharing some business insights with Learfield to take to its college clients, adding that he stays in touch with Kevin LaForce, the NFL’s vice president of corporate development. Learfield also has informally shared news of its NFL relationship with its schools, a means of adding the NFL’s cachet to its portfolio of services. Among Learfield’s more than 90 college clients are Alabama, Clemson, Mississippi State, Oklahoma, Penn State, Texas A&M and the Big Ten Conference.
What the deal brings the NFL is less clear, other than profiting from its ownership stake. When the league unveiled the Providence alliance, investing in early stages businesses — and ones that were synergistic with the NFL — were touted as key elements of the approach. An investment in Learfield would appear to miss both of those objectives.
“This doesn’t fit that model,” said one senior private equity executive, who requested anonymity. Two other senior executives in private equity repeated this opinion.
Since the Learfield investment in September 2013, the NFL has taken at least three other equity stakes in companies, but none was done within the framework of Providence, at least not publicly so. All three, however, would appear to meet the criteria of the initial NFL-Providence alliance, aiming to invest in earlier-stage companies that complement the NFL.
In May 2014, the NFL bought an equity position in children’s apparel firm Outerstuff, a league licensee. Earlier this year, the league acquired a piece of data firm Sport-radar. The equity came as part of a new sports data deal with the company.
Also this spring, the NFL took a stake in a new sports hospitality firm created by Bruin Sports Capital and RedBird Capital Partners. That duo acquired a 10-year license from the NFL to manage its big-event hospitality business, and that deal is housed in the new hospitality business in which the NFL has an equity stake.
When the NFL formed its alliance with Providence 27 months ago, six owners voted against the deal, arguing that the league should make the investments on its own. (Nine votes would have blocked the deal.)
Leagues taking equity positions in non-core businesses remains a rare occurrence, so perhaps it’s not a surprise the NFL is testing the waters in various ways.
As one of the private equity executives said, “The NFL is trying to figure out the best model to invest.”
