Burkle’s move helps stabilize Relativity Sports
Editor's note: This story is revised from the print edition.
Relativity Sports last week named Ron Burkle chairman of the board and announced that the billionaire would invest $30 million in the company.
Burkle, a founding board member of Relativity Sports and a co-owner of the Pittsburgh Penguins, plans to expand the company and invest in additional sports platforms, including possibly the hockey talent representation business, according to a source close to the sports agency.
Burkle has hired Morgan Stanley to explore the sale of the Penguins, which he co-owns with Mario Lemieux. The NHL’s rules, like those of other leagues, prohibit an owner from representing hockey players.
Relativity Sports has major player representation practices in the NBA, NFL and MLB already. Burkle’s Yucaipa Cos. and Colbeck Capital already owned the largest percentage of Relativity Sports, about 30 percent, before last week’s announcement.
Relativity Media, which filed for Chapter 11 bankruptcy protection July 30, owned about 25 percent, and senior sports agents and other senior sports executives own the rest of the company. Burkle’s plan to invest $30 million does include some equity, a source said, but the primary reason for the investment is to spur further growth of the agency.
|Penguins co-owner Ron Burkle (right) attends a White House ceremony for the ‘08-09 champs.
Burkle’s move gave immediate stability to Relativity Sports, which has been operating in the shadow of Relativity Media’s very public Chapter 11 filing. The studio launched the sports agency in the summer of 2012.
Although Relativity Sports is a separate company, Relativity Media’s Chapter 11 filing was something rival agents tried to use against the sports agency in an effort to lure its clients away, multiple sources said.
Relativity also announced last week that it had extended the employment agreements of all of its senior baseball agents: Mark Pieper, Fernando Cuza, Diego Bentz, John Courtright, Mike Milchin, Stephen Veltman, Giovanni Rodriguez, Ed Cerulo, Abel Guerra, Fred Wray, Troy Caradonna and Joe Sambito.
“Our firm is strong,” Pieper said. “We have at least six agents with more than 20 years in the business.”
Two baseball agents, J.R. Reid and Tom Little, who counts San Francisco Giants pitcher Madison Bumgarner among his clients, did resign, and both joined Ballengee Group.
Relativity Media also announced last week that co-president Happy Walters, who was CEO of Relativity Sports, had left the company. Josh Swartz, who was hired as president of Relativity Sports in May 2013, is continuing in that role.
A Relativity Media spokesman issued a statement that Relativity Media “has terminated the employment” of Walters. But a Relativity Sports spokesperson said, “Happy chose to leave Relativity Sports, and we wish him well.”
Walters, himself an NFL and NBA agent, was instrumental in building the sports firm. He added the baseball practice, which was formerly SFX Baseball, and the football practice of veteran agents Eugene Parker and Roosevelt Barnes, to his own practice to start Relativity Sports in July 2012. Walters also hired powerful NBA agent Dan Fegan in February 2013, although it was common knowledge in basketball circles that Walters and Fegan were not on good terms in recent months.
A source close to the sports group agreed that the parting was amicable and that the agency and Walters would continue to work together in representing some clients.
Walters, in a statement, said he was starting a sports and media company.