This is Buying Sandlot β€” the only newsletter that focuses solely on the business of youth sports.

A dedicated Thursday send following yesterday’s announcement of the Sports Training, Recreation, and Opportunities for the Next Generation (STRONG) Kids Act, a bipartisan House bill that seeks to create a youth sports grant program powered by federal sports betting excise tax revenues.

Let’s get to it.

In the email today:

πŸ›οΈ A Quick Explainer

The STRONG Kids Act is co-sponsored by Rep. Nanette Diaz BarragΓ‘n (D-CA) and Rep. Mike Carey (R-OH).

The legislation is backed by FundPlay Foundation’s youth sports industry coalition, which includes LeagueApps, TeamSnap, Players Health, Under Armour and Triple Crown Sports.

The bill authorizes Congress to appropriate an amount equal to 50% of federal sports betting excise tax revenues during the 2025 calendar year to fund a competitive grant program for youth sports organizations.

That would be about $200M based on past projections.

The program would be run by the Health and Human Services Department. It would take effect in FY 2027 if the bill passes and be authorized through FY 2037 with annual adjustments for inflation.

HHS would be required to make its first grant within a year of passage and would need to evaluate the program in a report to Congress every three years.

A key note: Directing federal excise tax revenues toward related spending is nothing new β€” airports, highways, wildlife preservation, etc. But those are established trust funds where money flows automatically. The STRONG Kids Act is an authorization to appropriate general funds that is benchmarked on an excise tax.

βœ… Who Is Eligible?

Government and nonprofit organizations only. For-profit entities cannot receive grants.

Eligible organizations can use grant funds toward contracts, partnerships, etc. with for-profit organizations, though.

A for-profit entity’s nonprofit wing would still be eligible to apply β€” i.e. the NFL Foundation.

πŸ’Έ How The Program Would Work

It would be a two-step approach.

Step 1: HHS fields grant applications from "national nonprofits or government organizations, regional nonprofits or state-based government organizations that run youth sports programs.”

  • Up to $5M for national orgs

  • Up to $2.5M for regional/state orgs

Step 2: Those larger orgs that win grants are then tasked with awarding subgrants to β€œlocal nonprofit or government organizations (that) have experience organizing youth sports.”

  • Grants must be no less than $10K

  • But no more than $50K

FundPlay executive director Jared Cooper told Buying Sandlot the intention is for 85-90% of grant funds to go to subgrantees with the rest going toward managing the program, which is standard.

🏟️ What The Grants Can Be Used For

The bill tasks national and regional orgs to make subgrants to:

  • Improve the effectiveness of a program related to physical activity or youth sports

  • Increase participation in such a program

  • Promote safety and health in such a program

  • Support the prevention of and response to physical, mental, and sexual abuse in youth sports through background checks, education, training, and mandatory reporting policies

A subgrant has to meet one of the four above criteria. National and regional orgs must commit to providing technical support to subgrant winners and detail their overall plans to HHS.

The bill outlines some eligible purposes for subgrants. Among them:

  • Lowering access barriers and increasing participation

  • Coach education and training

  • Concussion and injury prevention

  • Abuse prevention/response and SafeSport Compliance

  • Infrastructure investments

  • Administration of the Presidential Fitness Test

  • Working with insurance companies, risk management experts

The bill several times calls for orgs to prioritize youth with β€œlimited resources,” but it does not lay out an explicit definition.

Some grant purposes would need to adhere to HHS’ National Youth Sports Strategy.

πŸ‡³πŸ‡΄ Norway!

The much-celebrated Norwegian model is powered by significant funding from the nation’s state-owned gaming monopoly (although there are concerns about its continued viability).

Norsk Tipping injects about $400M in sports betting and lottery revenues into the ecosystem each year.

This is also already happening at the state level. At least three states β€” Ohio, New York and North Carolina β€” all send some portion of sports betting tax revenues toward youth sports.

πŸ—£οΈ What Industry Voices Are Saying

Project Play’s Tom Farrey β€” who has also previously advocated to use betting revenues for funding β€” called the legislation β€œthe most promising youth sports bill to date.”

"This bill isn't perfect," he wrote in part on LinkedIn, β€œbut it's a start down a good path.”

The bill has also been endorsed by the Afterschool Alliance, National Recreation and Park Association and YMCA of the USA.

Other industry comments:

β€œEveryone in this coalition has spent years working from the same conviction: youth sports change lives and strengthen communities, and every child should have the opportunity to be part of an amazing sports experience. Right now, a lot of people are asking how to make youth sports better, and this bill is an answer we can all get behind: invest in youth sports at a level that matches their impact. States across the country, and countries around the world, have already proven the model of directing sports gaming proceeds to fund youth sports. The STRONG Kids Act rightly aligns federal policy to build on an approach we know works." -- LeagueApps co-founder and president Jeremy Goldberg

"The STRONG Kids Act is years in the making and a critical step toward ensuring every family, regardless of zip code or income, has a real path into youth sports. We see every day what it means for a kid to have a team to show up for, and we're proud to stand behind this legislative commitment." -- TeamSnap CEO Peter Frintzilas

"Players Health has spent years working alongside coalition partners who understand that safety and access are two sides of the same problem: a child can't benefit from sports they can't afford to play, and they can't stay in a program that isn't equipped to keep them safe. The STRONG Kids Act channels resources directly to the community-based organizations doing that work every day, from local leagues to parks and recreation departments. We're proud to support legislation that strengthens both the safety practices and the accessibility of youth sports at the community level. This is exactly the kind of long-term, practical investment our industry should be rallying behind." -- Players Health CEO Tyrre Burks

"FundPlay Foundation is proud to have helped develop the STRONG Kids Act and support its introduction. This bill will help local organizations expand access, strengthen coaching and safety practices, and create more opportunities for young people, especially those in under-resourced communities." -- FundPlay executive director Jared Cooper

πŸ“† Next Steps

Cooper said the goal is to get the bill in mark-up.

The bill will likely fall under the jurisdiction of the House Energy and Commerce Committee, where BarragΓ‘n is a member. Changes are expected once the bill is marked up.

BarragΓ‘n and Carey are both expected to win their re-election bids, according to Cook Political Report. So the bill will remain viable into the new year.

The bill has been in the works for some time, so the timing was not purposeful.

But it is certainly advantageous for the STRONG Kids Act to drop right after our national crisis brought on by the U.S. Men’s National Team’s early World Cup exit and the ensuing pay-to-play debate.

The bill is not a magic bullet and it does not take any regulatory steps. But it identifies a critical issue β€” youth sports needs capital β€” and addresses it about as directly as possible given how our federal government works, and in a bipartisan manner.

That is far more likely to gain significant traction on Capitol Hill than the Let Kids Play Act β€” a flawed partisan messaging bill that lacks a serious funding mechanism. And far more likely to make a real impact on youth sports nationwide.

It is long past time for Congress to get in the game and put its money where its mouth is.

This is a grant program more than a regulatory bill.

Notably, it doesn’t mandate compliance standards across the board, or regulate any capital structure or practices in youth sports. That could be a positive or negative depending on your view.

My read is that this simply aims to do some good and put in place a mechanism for which underserved community sports programs can tap into money derived from a known vice in society.

I’d encourage anyone to run the bill through AI so you can ask your own specific questions about what is or isn’t eligible for funding (AI is very good at this particular use case).

Some things that jumped out to me:

1) There’s a lot in here about using the funds for things like β€œtraining” and β€œeducation” particularly as it relates to parents and coaches, such as encouraging β€œwater drinking” and implementing a β€œparent code of conduct.” Those things have subjective outputs. For-profit companies can be the beneficiary of these grants (by being contracted by the recipients). So the potential for grift, especially for these hard-to-measure areas, will be large. It would be great to see some hard measurement or certification required when funds are used for something other than directly paying for fields, facilities, equipment, and other tangible must-haves that directly enable participation.

2) The funds can be used for β€œacquiring or modifying any venue used for physical activity or youth sports”.

There’s little further detail on this, but our research shows that facility funding is one of, if not the biggest, single needs in youth sports.

This appears to be available to subgrantees only, which are capped at $50k. So obviously this couldn’t buy a facility of any real size or meaningfully renovate an existing one. Would love to see a mechanism for more cash to go toward meaningful facility improvements.

3) Norway’s lauded funding model generates that $400M for a population the size of South Carolina. $200M is a great step, but it only ticks up with inflation, is an authorization not an appropriation (meaning Congress still has to fund it each year), and it’s obviously just a drop in the bucket given the population of the US.

4) Nitpicks aside, this is a breath of fresh air compared to the Let Kids Play Act, which sought to ban a specific capital group and almost reads as a targeted takedown of Black Bear Sports Group. The STRONG Kids Act actually seeks to provide some solutions by defining recipients of federal funds to improve accessibility while not limiting the existence of for-profit and higher cost programs.

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