In recent weeks, Legends—a premium experiences company—announced strategic investments in both the American Ultimate Disc League (AUDL) and TeamTrak (a part of World Cycling League). The two deals are “the tip of the iceberg, and there will be a great cadence of announcements [to come],” said Mike Tomon (co-president and COO, Legends). Legends views emerging sports as a growth vertical for its core global services business (think: sponsorships, omnichannel merchandise, ticket sales, hospitality planning). And tie-ups with the AUDL and TeamTrak are “comprehensive service partnerships” that will help to drive short-term revenue. But as Tomon explained, the opportunity to invest in some of the upstart platforms it is helping to professionalize and grow is most exciting. “We’re investing in a place we feel really good,” he said, and where they “know what the outcome [will be].”
The demand for live sports content, changing consumer behaviors and the maturation of Gen-Z have spurred the launch of countless sports properties in recent years. One common trait of the successful ones is that they have extremely passionate and engaged owners. Both AUDL and TeamTrak checked that box.
Legends also liked how the two leagues maintain a low barrier to fan entry (think: most people are familiar with the games); have a track record of engaging diverse audience segments; are poised for international growth; and look to be viable from a live-event perspective.
JWS’ Take: Legends has constructed a holistic service platform for sports properties over the last 13 plus years, working with rights owners on everything from planning to sales to sponsorship, Tomon siad, “and then when [the fans] are congregating in person, how [they should] optimize that situation as well.”
Legends has a host of mature sports properties as clients, but earlier this year, the company took steps to diversify its client portfolio and ramp up its business within the emerging sports niche. The company acquired Gabby Roe’s Maestroe Sports & Entertainment in February and subsequently launched Legends Growth Enterprises (LGE), which Roe now leads as president. Prior to founding Maestroe, Roe was the general manager of the AVP Pro Beach Volleyball Tour (2002-2008) and the executive director of Major League Lacrosse (1999-2002).
Maestroe spent the previous decade helping to grow emerging sports properties, including the American Cornhole League and Spikeball. “We did consulting. We did sponsorship sales. We would fill in and round out the areas of their front office [that lacked expertise],” Roe said.
Legends saw the opportunity to combine Roe’s unique approach to growing emerging sports assets with its resources and expertise. Tomon said they wanted to help upstart leagues scale “and really take that second segment of the hockey stick journey on their growth.” Legends also felt that the strength of the company’s balance sheet would enable it to invest in and direct these emerging businesses.
Legends is investing between six and eight figures in emerging properties it believes are positioned to achieve accelerated growth in sectors where the company excels. Investments in upstart leagues are enticing to Legends because of the potential upside. For example, PFL recently raised money at a $500 million valuation, and One Championship released new shares at a $1.2 billion valuation last December. “The theory [behind] these emerging sports has started to come to fruition with the [$4 billion] sale of UFC and some of these other properties,” Roe said.
The UFC is undoubtedly an outlier, but the opportunity to hit that kind of home run is why Legends is putting money behind some of these early-stage sports properties. Legends isn’t basing its business on the idea that “every shot is going to be the UFC,” Tomon said. ”There will be another UFC, no doubt. It’s just making sure we’re in the right position for it.” UFC was never a Maestroe client and is not currently an LGE client. Legends does handle omnichannel merchandise sales for the MMA promotion.
Legends’ interest in investing alongside a more traditional service-for-fee relationship should be appealing to many emerging sports leagues. Roe said the agency and property are “much more aligned when [they] both have the same long-term building of EBITDA objective,” Roe said. Rights owners who do not find the option appealing can purchase the “360 services” on an a la carte basis.
Tomon defined long-term as “10 to 20-plus” years. He explained that there is a lot of heavy lifting to be done to get a new sports property off the ground, and to do it correctly, Legends and the upstart league need to have a solid agreement in place.
Brand partnerships are a bottom-line driver for most high-growth sports properties (AUDL and TeamTrak included). In many cases, those deals can also be a “major source of co-promotion,” Roe said, and brand tie-ups would be an area LGE will focus on with both.
Legends Growth Enterprises will also help the emerging sports properties grow their fan bases through the development of new media partnerships both domestically and internationally, and eventually through live events. “And all of that is tied together with data [insights] and analytics that we’re going to be able to dive super deep into,” Roe said. The presumption is knowing who the fan is and why they are engaging with the league will enable the property to derive more revenue from those individuals and their partners.
(This article has been corrected in the final paragraph to reflect that the name of the Legends division is Legends Growth Enterprises.)