Premier League Lacrosse recently closed on a Series D funding round. The Chernin Group (TCG) led the round, with World Wrestling Entertainment (WWE), Kevin Durant’s Thirty-Five Ventures, Joe Tsai’s Blue Pool Capital and Arctos Sports Partners among the other investors to participate. It is not clear how much the tour-based league raised or the valuation. The privately held company opted not to release either data point. However, PLL’s valuation has doubled, according to Bloomberg, since the league last raised capital in June 2021.
TCG partner Mike Kerns said the firm’s confidence in league co-founders Mike and Paul Rabil, its performance to date and its plan moving forward drove it to lead the round. “The combination of a strong team, a growing sport, their innovative and forward thinking approach to media, distribution and storytelling, and the diversified revenue proof points they have already established are representative of the types of investments we love to make at TCG.”
JWS’ Take: TCG’s latest investment in Premier League Lacrosse is its second in the professional outdoor lax organization. The firm made a small investment in PLL’s seed round.
Why did TCG decide to lead the league’s latest round after passing on its Series A, B and C? Kerns explained that the 12-year-old firm has chosen to focus on growth stage companies over the last four-plus years. “We just stopped doing the $1 million to $10 million investments,” he said. Since 2018, TCG’s average check size has been between $40 million and $50 million.
But Kerns said PLL was “always one of those businesses that if it got to a certain point, we thought it would make a lot of sense for us to get more involved and more active and help them scale.”
TCG likes to invest in consumer brands that are category leaders in large markets. PLL is the only outdoor lacrosse league in the United States after merging with Major League Lacrosse in December of 2020. League data indicates there are about 15 million lacrosse fans across the country, up from 10 million in 2018.
TCG also looks to invest in companies with “established brand credibility and audience connection, and diversified business models,” Kerns said. TCG will not invest in a business reliant on a single revenue stream.
PLL has proven licensing, commerce, sponsorship and ticket sales can all be “real and meaningful” revenue streams for the league. While the privately held entity does not disclose revenue-related data, Kerns said each of those business lines has grown steadily over the last four years.
Having a diversified revenue model is important for an upstart sports league, because in the short term, it’s not going to generate billions of dollars in media rights revenue like the big four leagues—despite what its fundraising deck might say. Terms of PLL’s newly signed four-year deal with ESPN were never disclosed, though it is believed to be worth eight figures. The league declined to comment on the subject. Kerns said the number represents a “meaningful” revenue stream for PLL but adds that it’s just one component of the league’s overall business strategy.
Money aside, the move to ESPN has dramatically raised the league’s reach and profile. “When your content is only available to the most ardent fans, it is extremely challenging to grow the brand,” Andrew Brown (VP, global strategy and corporate development) said. “It’s something at WWE we’re constantly thinking about.” Back in March, the company moved its Premium Live Events and archive from WWE Network to Peacock.
Current sports valuations are largely based on the idea that lucrative media-rights deals will continue to climb. Historically, they have, but as the pay-TV universe continues to shrink, it’s possible available dollars will increasingly flow towards the top of the sports pyramid, forcing lesser properties to take flat—or declining—deals. “There will be selected properties that just aren’t going to demand high rights fees,” said the former head of one sports broadcaster. Those properties will be “hard to sell for a lot more money because they just don’t make enough of a difference.” PLL has averaged 108,000 viewers across seven ESPN or ESPN2 broadcasts this season.
TCG has no concerns regarding the future value of the league’s media rights. “Live IP that people care about, that represents a growing sport with an attractive demographic, will continue to be more and more valuable over time,” Kerns said.
TCG sees PLL’s revenue growth and participation in the sport growing and believes the league can become a “very valuable long-term brand and business.” Kerns was hesitant to contextualize the potential upside but said “at the end of the day, we’re investors. Our job is to invest capital and have that capital produce good returns.”
That does not mean those returns will come quickly. “We understand the trajectory; even the UFC took 15 years to go from $2 million to $4 billion in value. It’s a long-term investment,” Brown said.
For WWE’s venture arm, financial upside is only part of the value equation. “The primary motivator for us is strategic in nature… We’re really looking to generate shared learnings as [PLL] explores innovative ways to monetize a growing and avid fan base and also as they look to identify new ways to grow the casual fan base for lacrosse more broadly.”
PLL plans to introduce a new offseason tournament and a new content strategy in an attempt to realize that potential. The tournament, which will take place prior to the 2023 college lacrosse season, will serve to further activate the league’s current fans and to help develop new ones.
The PLL tournament will follow the Olympic Sixes format. The league is helping to spearhead the push for lacrosse’s inclusion in the 2028 Los Angeles Summer Olympics on the presumption that Olympic participation can help popularize the game.
The league’s expanded non-live media approach will include a variety of formats and platforms. “That could be social. That can be premium content on streamers. That could be educational content. That could be events or other in real-life activations,” Kerns said.
PLL plans to invest in both scripted and unscripted programming. The league recently released its first scripted documentary, Fate of the Sport, at the Tribeca Film Festival. ESPN Films purchased the worldwide rights to the film.
TCG’s expertise integrating content and commerce and building businesses around affinity should provide strategic value to PLL beyond its capital. Mike Rabil said: “TCG scaled and exited Barstool’s business with the PENN acquisition, and they scaled Action Network, both in the sports space, both content companies. They have a deep network of professionals we will tap into, and with their new production house, we will look to them to help us continue to tell incredible lacrosse stories to a broader audience with the hope to convert net new lacrosse fans.”
The same goes for WWE. “They are a 365 touring business,” Rabil said. “We think their logistics, commerce, and talent-management sides of the house can really help develop ours.”
(This article has been corrected to reflect that PLL merged with Major League Lacrosse in 2020.)