“I think they can pick and choose who they want.” Sportico’s Brendan Coffey on XFL Seeking Investors Ahead of 2023 Kickoff
By Reid Johnson
On the September 2nd episode of The Markcast, we were fortunate to have Brendan Coffey the sports finance reporter for Spotico on the show to talk through his recent report involving the XFL and Redbird Capital seeking investors ahead of the February 2023 return of the XFL.
When it was reported that the XFL was seeking money and potentially giving up 35%-45% equity stake in the league to do so, questions arose regarding the timing in which the XFL was choosing to go about this route, months before the league has even played its first down of football in the 3.0 era.
“They've been funding it till now, and, and I, I think it's pretty par for the course. In a business arrangement like this, I wanna bring in new money right, and, and that's, it's not just about the money, it’s about probably bringing in strategic partners that will have more of an interest in making sure the XFL is successful.”
Questions have also been posed about the viability of investing in spring football, with FOX Sports and their USFL property also seeking funds from people who would invest in spring football.
“There's a lot of demand these days to get to invest in sports and sports-related properties. So I don't think they'll have a problem finding a partner, I think they can pick and choose who they want.”
Brendan knows the value that sports and football especially carries, and believes that high valuation will carry over to the spring as well.
“You have to take a step back and look at sports in general, and there's a lot of money, a lot of institutional money that wants to get into sports.”
“That kind of, growth that outpaces the stock market over time, but that also is pretty shielded from recessions and consumer worries and things like that. It has a lot of appeal to institutional money and you see a lot of these funds, just getting a lot of investor money. So Redbird for instance they're raising a new fund with that, they're confident.”
To the question of why the XFL and Redbird Capital would look outside its own funds for investors, Brendan responded:
“There are a few aspects to it. The main one is the relationships. I think they wanna find partners who are gonna be invested in the XFL, help make it a winner. Right? Cause there are competing you know, other football league out there.”
Brendan also believes outside investors could help lighten the load of league co-owners Dany Garcia and Dwayne Johnson.
“Bringing in outside money, it does take a little bit of pressure off, The Rock and Dany Garcia and Redbird too, with having to continue to put more money into the league.”
In regards to the XFL potentially giving up too much stake too early in the league:
“The people who bring new money to help fund…what I've heard from our various sources, it’s not about cashing out. It really is about kind of expanding the pie.”
As to why people would want to invest and seek out investing in the XFL and other sports-related properties, Brendan points to the “sports media play” that everyone seems to be focused on getting into now.
“When you talk to people in the sports business investing side. They really view sports as a media play. So XFL is a media play. AC Milan is is a media play. There's, there's a lot of expectations that, that soccer will become more important to viewers in the US. With all of these, every sports property is a way to provide content to the media companies, which are willing to pay a premium for that content because it's the one thing people watch nowadays.”
For my complete interview with Brendan Coffey of Sportico, check out the link below.
