By Matthew Futterman
The NFL is joining with two investment firms on a venture to
build up the league's premium hospitality business.
The yet-to-be-named new company will have investments from the
NFL, Bruin Sports Capital, led by former IMG President George Pyne,
and RedBird Capital Partners, led by former Goldman Sachs sports
banker Gerald Cardinale. The goal is to expand what is now known as
NFL On Location, which provides travel, entertainment, hospitality
and on-field access at the league's biggest events--the Super Bowl,
the Pro Bowl, the NFL Draft and the league's international
games--and then eventually sell those services to other sports
entities, awards shows, and major events.
The venture represents a first for the NFL. The NFL is
projecting some $12 billion in revenue this year. However, that
money comes almost entirely from NFL-related activity. The league
has never truly spun-off a part of its business or formed a
separate company aimed at servicing the needs of other sports
entities or entertainment companies. The venture should test the
power of the NFL brand as a force beyond the football field and
especially internationally, where the hospitality business at
sports events is far behind the U.S. market.
Kevin LaForce, vice president of corporate development for the
league, described NFL On Location as a "nicely profitable business"
with profits of more than $10 million annually. "We feel there is a
fair amount of growth that can be found," he added.
Trips to the Super Bowl this year through NFL On Location cost
$6,000 to $10,000 per person, depending on the seat location.
Packages generally include airfare and hotel accommodations plus a
reception the day of the game.
For Mr. Cardinale, the venture steals a page from his playbook
at Goldman, where he helped set up a partnership between Dallas
Cowboys owner Jerry Jones and the Steinbrenner family, owners of
the New York Yankees, called Legends Hospitality Management, which
seeks to leverage the brand power of those teams to provide luxury
hospitality and concessions at other stadiums and venues in the
U.S.
"We will be opportunistic and methodical," Mr. Cardinale said of
the new company. "This could work anywhere you have iconic events
where fans would appreciate behind-the-scenes access and premium
hospitality services."
This NFL venture is the first investment for Mr. Pyne's Bruin
Sports Capital, which raised $250 million last year to invest in
sports-related businesses. The NFL first began looking beyond
football to build revenues in 2013 when the NFL partnered with
Providence Equity Partners, the private equity firm, to create a
$300 million fund to invest in growth opportunities in media and
technology.
Write to Matthew Futterman at matthew.futterman@wsj.com
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