Eric Grubman, former executive VP of the NFL during a period of tremendous growth and John Collins, former CEO of On Location Experiences, a business started by the NFL, have joined with investing guru Chris Shumway to form Sports Entertainment Acquisition Co., a blank check company that filed for an IPO Monday evening.
“We intend to focus on the sports and entertainment sectors as well as the technology and services that are associated with these verticals. Examples of these technology/service areas include media, ticketing, payments processing, entertainment travel, gaming, loyalty programs and many others,” the company said in its prospectus.
Specifically, the trio are aiming to use the $350 million it hopes to raise to buy a high-growth business with the potential to become a multi-business platform: “Examples of businesses that have followed this trajectory include ESPN, Ticketmaster/StubHub, Fanatics, On Location and many others,” the prospectus said.
Joining Grubman, Collins and Shumway in management is Natara Holloway. She has been an executive in various capacities with the NFL since 2004 and is currently the league’s Vice President of Business Operations and Strategy for Football Operations. Rounding out the management team is Timothy Goodell, the chief counsel of oil and gas producer Hess Corporation and the brother of NFL Commissioner Roger Goodell.
PJT Partners, a publicly traded investment manager, is the sponsor of the SPAC. PJT itself has institutional experience with sports businesses through PJT partner Don Cornwell, who has worked on some of sports’ largest and most complex deals. PJT will be an underwriter of the IPO with Goldman Sachs as the lead underwriter, according to the filing with the SEC.
A SPAC—special purpose acquisition company—is a publicly traded company formed to make an acquisition. However, SPACs can’t hold discussions with any potential partner before their IPO, so their initial success depends a lot on investor faith in their management team.
Grubman is chairman and chief financial officer of Sports Entertainment Acquisition. He was one of the NFL’s crucial dealmakers in his 14-year stint with the league. After stepping down in 2018, he advised and later joined On Location Experiences. On Location Experiences offers unique experiences for ticketholders and corporate sponsors in sports and entertainment, such as celebrating on the field with the Super Bowl champions and VIP concert experiences. Grubman has also been a banker at Goldman Sachs, where he helped the estate of Leon Hess sell the New York Jets to Woody Johnson.
On Location originally was spun off from the NFL as its own business in 2015 and was acquired for about $700 million at the start of the year by Endeavor, which owns part of Ultimate Fighting Championship. Grubman is also on the board of Noble Energy, a publicly traded oil and gas producer, as well as the U.S. Naval Academy Foundation; he is a 1980 Naval Academy graduate.
Collins was CEO of On Location Experiences from 2015, the year the NFL spun the business off, until January, when it was acquired by Endeavor. He previously was chief operating officer of the NHL for nine years after a stint as CEO of the Cleveland Browns football team. He was an executive in the NFL for 15 years before joining Cleveland.
The third co-founder, Shumway brings investing and Wall Street experience to the helm. He began Shumway Capital in 2001 and grew the business to $90 billion in assets under management. In 2011 he converted Shumway Capital to a family office—meaning he invests solely his owns assets and that of families and employees.
Sports Entertainment Acquisition is the second sports-focused SPAC to come to market in recent weeks. A Gerry Cardinale and Billy Beane-led blank check company called RedBall Acquisition Corp. raised $575 million in an IPO with a stated focus on finding a sports team to purchase. RedBall has two years to do so.
SPACs have been wildly popular this year, including with sports personalities even if they don’t specify a sports industry target. William Foley, owner of hockey’s Vegas Golden Knights; Dodgers minority owner Todd Boehly; and former football coach and TD Ameritrade chairman Joe Moglia have recently formed their own SPACs.
In Sports Entertainment Acquisition’s case—as with every SPAC—the company reserves the right to acquire any type of business once it goes public. For instance, the SPAC that brought Hall of Fame Village, an NFL-themed mixed-use development in Ohio, originally formed to find a financial technology startup. Failure to find any acquisition within two years means the business has to return money to shareholders and disband. That was the fate of the first sports SPAC in 2010, which bid and lost on the Chicago Cubs, Florida Panthers and Montreal Canadiens.