Black Bear Sports Group — a former Buying Sandlot sponsor — provided this statement regarding the Let Kids Play Act:
"We look forward to engaging with lawmakers and sharing all the ways we are growing youth hockey at four times the national rate, providing free and low-cost programs and letting more kids play by saving and revitalizing ice rinks.” — Evan Nierman, Black Bear Sports Group spokesperson
Nierman also said Black Bear "is not private equity, nor is the company controlled by private equity. It’s a family company that has a passion for saving ice rinks."
The latter comments are particularly pertinent in the context of the Let Kids Play Act — not just for Black Bear, but for the entire industry.
As Kyle outlined yesterday in our special send — the most important term in the bill is “covered firm,” which is defined as:
A private equity fund OR
A company owned/controlled by a PE fund
And PE is defined as:
A person who would be an investment company, as defined in the Investment Company Act of 1940, but for paragraphs (1) or (7) of section 3(c) of that Act (15 U.S.C. 80a–3) AND
Directly, or through an affiliate, exercises control of such company
In simpler terms: PE → Covered firm → Banned from youth sports if the bill passes.
A now-dismissed defamation complaint filed in Maryland federal court last year named Black Bear, founder and then-CEO Murry Gunty and Blackstreet Capital Holdings, LLC as co-plaintiffs.
Blackstreet was also founded by Gunty; it says it is not a PE fund on its website.
The complaint — obtained by Buying Sandlot — stated Blackstreet was "one of the two controlling shareholders in Black Bear Sports Group.” The judge also wrote Gunty “jointly owns BBSG with Blackstreet” in her opinion memorandum dismissing the complaint in January and press releases, webpages and news reporting have also connected the companies.
The bottom line: If the bill passes — which is still a long shot at this point — the subsequent test is relatively straightforward.
Entities are either outside Section 3(a) of the Investment Company Act and are not considered PE or a covered firm. Or they have a Section 3(c) exception and meet the PE/covered firm criteria.
The bill does give the FTC room to deem covered firm status on substance rather than structure (and likely set off an avalanche of litigation). And covered firm status would obviously not factor into general antitrust enforcement.
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