Eli Manning's Firm Acquires Major Youth Sports Operator RCX Sports

Eli Manning, the former New York Giants quarterback, has a private equity firm, Brand Velocity Group. 

Last week, CNBC reported that the company was acquiring RCX Sports, which manages the licenses for official youth sports programs across all major US leagues, including the NBA, MLS, WNBA, NHL, MLB, and Manning's former stomping grounds, the NFL. 

CNBC also reports that RCX has around 150 employees and makes money by distributing items such as uniforms and equipment, as well as by serving local parks and recreation centers. 

CNBC said that the financial details of the acquisition weren't disclosed, but that it was "supported by a broad investor group including other former and current athlete partners Emmitt Smith, Larry Fitzgerald and Jameis Winston."

Some of the programs RCX is involved in include NFL Flag, Jr. NBA, Jr. WNBA, MLS GO, NHL Street, and MLB Pitch Hit & Run. 

NFL Flag has about 1 million kids involved, according to its CEO, Izell Reese. 

Why Private Equity Is Interested in Youth Sports

CNBC says that the youth sports business is "well suited" for private equity, citing a passionate customer base, reliable cash flows, and the fact that there's a new sport each season, which means more fees to charge. 

Something else CNBC pointed out was that the "standard private equity playbook" includes rolling up "a variety of smaller leagues or apps, taking cost out by eliminating backend duplication and gaining scale via a series of acquisitions."

This is because there's not much cohesion in these youth sports, so there are numerous mobile apps for chatting with coaches, paying fees, and keeping track of games. 

That said, there has been some discourse around private equity not getting involved in youth sports. 

Lawmakers Push Back as Manning Defends the Strategy

Last month, U.S. Rep. Chris Deluzio (Pennsylvania) and Sen. Chris Murphy (Connecticut) introduced a bill known as the "Let Kids Play Act" that would ban private equity from involvement in youth sports. 

The industry is worth over $40 billion, and the two lawmakers said that youth sports are “dominated by private equity, with the singular goal of extracting as much profit as possible from families," a statement read. 

From there, Murphy added personal context, stating, “As a hockey dad, I’ve seen how viciously these private equity companies rip families off."

However, Manning, a two-time Super Bowl champion, said his private equity firm is different. 

“It’s very much more access, keeping the prices low, and just growing this,” Manning said. “The fact that you’re working with the professional leagues, they don’t want this to be a heavy cost to kids. They want more kids playing sports, being active, being out there. So our goal is to bring in capital so they can scale that, they can expand that.”

Manning has been a supporter of flag football and aims to establish it as a varsity sport for boys and girls at the high school level.