In September, RedBird Capital Partners sold its 40% interest in OneTeam Partners at a $1.9 billion valuation. HPS Investment Partners, Atlantic Park and Morgan Stanley Tactical Value bought the PE firm’s stake in the athlete IP licensing and marketing company. The NFL Players Association and MLB Players Association remain the majority owners.
OneTeam’s new investors see group licensing as a way to bet on sports’ future growth. “OneTeam is leading the way in advancing the commercial rights of athletes collectively. We view the platform as a significant opportunity to access and participate in the long-term economic progress of professional and collegiate sports,” said Scot French, a governing partner of HPS Investment Partners.
HPS, Atlantic Park and Morgan Stanley are also betting on OneTeam’s ability to continue growing its business. Malaika Underwood (interim CEO, OneTeam Partners) said the company would do that by creating new revenue streams for the athletes it currently represents and adding new player association and athlete groups.
JWS’ Take: If you believe leagues and teams will continue to drive up non-media rights revenues, then the value of athlete IP should rise in lockstep. Take the NFT trend, for example: Leagues, teams and players all benefited as commercial partners playing in the space needed team/league marks and player NIL rights for their products.
It is also a wager on the increasing influence athletes hold and the power that exists in the collective. “Think about the recent victory by the U.S. Women’s National Team for equal pay, the changing landscape for college athletes or the movement by the MLBPA to unionize Minor League Baseball players,” Underwood said. “The collective concept drives both market efficiency for brands, allowing us to attract business across sports, and incremental value for athletes by way of the industry knowledge and category expertise we bring to bear across sports.”
OneTeam, which currently represents eight professional players associations along with a host of college athletes, has collectively generated hundreds of millions of dollars in revenue for long-established PA partners (such as the NFLPA and MLBPA), for more recently established PA partners and for the college athletes who gained the ability to start monetizing their name, image and likeness within the last 18 months. OneTeam would like to represent every professional PA and athlete across the globe. Landing the NBPA appears to be the biggest hurdle to achieving the goal stateside. The NBA union did not respond to requests inquiring if a tie-up could be on the horizon.
Underwood does not believe OneTeam’s potential is close to being fully realized. She said future growth can come from driving more revenue for “existing partners through licensed product sales, athlete marketing, sponsorship, content production or media,” and by increasing the number of athletes the company serves.
OneTeam’s most mature players associations, the NFLPA and MLBPA, still present the greatest opportunity for growth. The company is actively working to add new union partners and to expand its college business, which already includes more athletes, at more schools, than anyone else.
The return of EA Sports’ college football game, recently delayed until summer 2024, is perhaps the most highly anticipated collegiate sports product. However, Underwood said there are group licensing opportunities that will give a wider array of college athletes the opportunity to monetize their name, image and likeness. For example, “our name and number T-shirt program with Fanatics includes football and men’s basketball, but also women’s basketball, volleyball, soccer, baseball and softball,” Underwood said.
Trading cards and jerseys are some of the other foundational categories expected to drive revenue for college athletes.
The passive sale of group sponsorship rights could emerge as a viable revenue stream, too. “Brands have struggled to date to really connect with college athletes at scale,” Underwood said. “There are marketplaces that provide opportunities for social media posts, appearances or autograph sessions. But if you look in the pro space, there is also revenue driven through the passive use of group rights in sponsorship executions.”
In addition to college sports, women’s sports offer the company meaningful upside—at least on a percentage basis. “We’ve only scratched the surface in meeting the demand that we know exists for products, access and content in women’s sports,” Underwood said. “The PAs we represent across women’s basketball and soccer have seen double- and triple-digit licensing revenue growth year over year.”
The sheer number of sports leagues and athletes abroad also makes the possibility of international expansion intriguing for OneTeam. “There is a lot of fragmentation overseas, and we see a connection, through the infrastructure and platform that we’re building in college, to potentially bring value [to those athletes],” Underwood said.
It remains to be seen if the domestic team can successfully navigate the complicated global market.