It was announced back in mid-January that prominent sports investment firms The Raine Group (TRG) and Causeway Media Partners (with backing from MidCap Financial) had partnered to create Thrill One Sports & Entertainment. The action sports roll-up brings Nitro Circus, Street League Skateboarding (SLS) and Superjacket Productions (SP) under a singular roof and immediately makes Thrill One ‘the world’s largest independent action sports operator and media company’. The newly formed entity will host over 30 live events, distribute over 100 hours of live content and produce over 175 episodes of television programming in 2020.
Howie Long-Short: Historically speaking, action sports properties have been disparate in nature (remember, many were founded by the athletes themselves), which has made it difficult for brands to effectively reach the attractive fan demo. The Raine Group VP Scott Lexton said his fund believes by “professionalizing and scaling-up [an action sports] business that produces a large number of events and has a lot of content, that brands would have a natural partner to align with in the space.” It doesn’t sound as if Thrill One is done rolling up assets, either. CEO Joe Carr indicated that the company would continue to look at “potential M&A opportunities and complimentary I.P.”
The Raine Group has been “long on action sports – really, sports I.P. that can be owned on a mobile basis for an extended period of time” – for several years now; the global merchant bank first bought into Travis Pastrana’s Nitro Circus back in 2013. Lexton suggested that the firm’s desire to become the “category leader” ultimately lead to partnerships with SLS and SP. “Nitro Circus built up a pretty large infrastructure, in terms of headcount and capabilities [over the last 7 years], but the more I.P., events and content that can be easily and seamlessly bulked on to that inventory and those operating costs, the more profitable [the business can be].” Given today’s media landscape, where consolidation is rampant, TRG also felt the timing was right to roll-up like properties. Lexton explained that “it’s becoming harder and harder for smaller properties to survive. Scaled, combined properties and genre winners are the ones thriving.”
TRG is bullish on action sports because “they’re easily understood [by viewers], they’re global [in their appeal], they’re naturally engaging and awe inspiring.” Lexton said the investment firm “looks at the younger demographics, their use of social media and declining interest in traditional sports, and likes how action sports content and action sports athletes [compare on a relative basis. Those competing] are inherently authentic and generally associated with cultural coolness and that is what thrives on social media platforms.” The numbers support TRG’s thesis. Action sports are the 4th largest sports genre on Facebook and Instagram.
Action sports I.P. holders have “four core” revenue streams: media, sponsorship, live events and lifestyle and apparel. While SLS will support Thrill One’s sponsorship, live events and lifestyle and apparel efforts, the acquisition of SP will support its media ambitions. “The creation of compelling content – for both the core audience and the broader public – is critical to emerging sports properties. [SP] is best in class [in terms of] producing non-scripted television and [the belief is] their capabilities, expertise and network of talent and contributors will help [the company] sell more shows.” Lexton said the expectation is that there will be opportunities to push content to both traditional media buyers as well as the new players in the space (think: Snapchat, Instagram, Facebook and Amazon).
Fan Marino: The 2020 Summer Olympic Games will include action sports, so the additional exposure should be beneficial “in expanding [Thrill One’s] reach and commercial potential”, but Lexton says they won’t be building the business around an event that happens every four years. “One of the things [TRG] likes about action sports is that they are not completely dependent on legacy tentpole events. They can be built and become popular on non-traditional media channels (see: social) and that allows the company to deliver content, year-round, relatively cheaply.”
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