Brand Velocity Group — which counts Eli Manning among its partners — has acquired RCX Sports, the licensing partner and operator of NFL Flag and the other major sports leagues’ official youth platforms.
Terms were not disclosed. RCX — previously owned by The Raine Group — will maintain its brand with CEO Izell Reese and its management team staying on.
This is a notable deal for the obvious reason — RCX is a major “base of the pyramid” player due to not only NFL Flag, but also MLS Go, NHL Street, MLB Pitch, Hit and Run and the Jr. NBA and Jr. WNBA.
But it is also the first major private equity move since the Let Kids Play Act was introduced.
This deal was obviously in the works well before the bill was unveiled, but BVG and RCX were clearly signaling to Washington with a rollout that was just as much about what won’t happen as what the plans are.
“It’s very much more access, keeping the prices low and just growing this,” Manning told CNBC. “The fact that you’re working with the professional leagues, they don’t want this to be a heavy cost to kids. They want more kids playing sports, being active, being out there. So our goal is to bring in capital so they can scale that, they can expand that.”
BVG has the majority stake, but there are a slew of individual and institutional strategic investors - Darco Capital, Hamilton Lake, St. Cloud Capital, Three Oceans Partners, Larry Fitzgerald, Emmitt Smith and Jameis Winston.
Orrick, Herrington & Sutcliffe (RCX) and Sidley Austin LLP (BVG) were the deal's legal advisors; The Raine Group LLC was RCX's financial advisor while CohnReznick Advisory LLC was BVG's accounting advisor.
Three more quick notes:
1) This is not BVG’s first youth sports play. The firm acquired Score Sports, an apparel, equipment and uniform distributor, in 2022. There is no talk of any synergies between the companies so far.
2) The reaction to the deal was overwhelmingly positive. And understandably so. People trust Manning, BVG is clearly sincere in its goals and the pro leagues’ involvement also instills confidence.
But BVG, and every other PE firm in the industry, would still be on an automatic two-year divestment clock if the LKPA were to pass — a reminder of how the bill’s narrow focus on one type of capital structure remains a colossal flaw.
The bill says PE firms can prove they have not engaged in “vulture practices” to stay in the industry, but that still seems likely to be a fraught — and highly litigious — process.
3) I covered a wild game at the Superdome where Manning and Drew Brees combined for 11 TD passes early in my career. And now they are both headline names on my current beat — the BVG/RCX deal comes eight months after Brees and Unrivaled Sports launched a flag partnership.
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