Youth sports in the U.S. is a $19.2 billion industry, The Chernin Group's Jesse Jacobs breaks down their big investments bet
Jesse Jacobs and The Churnin Group have invested over $3 billion in media, sports, and content businesses, including Barstool Sports, Peyton Manning’s Omaha Productions, and Unrivaled’s youth sports venture.
1. Sports Investment is Shaping New Business Models:Investors like Jerry Cardell are taking bold steps in sports, especially in college athletics, with innovative models that could revolutionize ownership structures. This includes loans to athletic departments, paving the way for future revenue sharing.
2. The High Stakes of Youth Sports:Youth sports are a booming industry, with parents willing to spend almost anything to give their children a competitive edge. However, there's growing concern about affordability and the pressure families feel to invest in their kids' athletic futures.
3. Unrivaled Opportunities in Youth Sports:Jesse Jacobs and partners like Josh Harris and David Blitzer are betting big on youth sports through their company, Unrivaled. They see huge potential for premium experiences in baseball and football, with plans to expand into other sports.
4. Media and Entertainment Investments:Jacobs discusses his firm’s investments in sports media, including Barstool Sports and Peyton Manning's media ventures, emphasizing how passion, creativity, and personal involvement from talent are key factors in their success.
5. The Future of College and Professional Sports Media:The sports media landscape is constantly evolving, with leagues facing challenges in retaining broadcast partners. Jacobs predicts more disruptions in college sports and sees major opportunities in improving fan experiences, such as in the NBA.
A Deep Dive into Sports and Media Investments with Jesse Jacobs
Investing in College Sports: A Fluid Landscape
In a conversation about college athletics, one of the standout points was the new business model created by Jerry Cardell, who is moving fast in the college sports space. Jason Kelly compared this to the pre-social media era, stating that “the world is about to change.” Cardell’s company plans to loan large sums of money to college athletic departments, with the aim of capitalizing on name, image, and likeness (NIL) opportunities. Alex Rodriguez likened this approach to the early internet days, adding that Jerry has always been “one step ahead of the curve.”
According to Kelly, this could lead to a future where major private equity firms like Blackstone and KKR own major college sports teams, like Duke Basketball or Michigan Football.
Youth Sports: A Burgeoning Market with High Barriers
The episode highlighted the massive, but fractured, youth sports industry. Alex Rodriguez and Jason Kelly delved into the high costs associated with youth sports, acknowledging the sacrifices parents make. Alex shared how growing up in South Florida, families often stretched beyond their means to support their children’s athletic dreams.
Jesse Jacobs, co-founder of The Churnin Group, emphasized the potential for youth sports, especially in baseball. Jacobs and his partners, including Harris and Blitzer, have already invested in Cooperstown’s youth baseball experience. But they have broader ambitions, such as expanding into football with their newly acquired fields next to the Hall of Fame in Canton, Ohio.
Jacobs commented, “Kids aren’t going to stop playing sports, and parents won’t stop spending money to enhance their kids' athletic potential.” He and his team believe youth sports is a fragmented industry ripe for consolidation and innovation.
Barstool and Beyond: Investing in Media Personalities
Another key topic was the firm’s approach to investing in talent-driven media businesses, such as Barstool Sports and Reese Witherspoon’s Hello Sunshine. Jacobs described how The Churnin Group looks for creators who have passionate audiences, who come up with their own ideas, and who are deeply involved in their businesses.
“The first time somebody called us about Reese, we said, ‘Okay, we’ve seen this before. Is she really into it?’” said Jacobs. When Reese showed up for a 7 AM breakfast the next day, handling all the negotiations herself, Jacobs knew they were onto something big.
Their investment in Barstool Sports followed a similar pattern. According to Jacobs, “We saw the Google analytics for Dave Portnoy, and we fell off our chair.”
The Future of Sports Media
The episode also explored the rapidly changing landscape of sports media. With major deals in play, such as the NBA’s new broadcast rights, Jacobs believes the college sports scene is the most ripe for disruption. He noted the chaos caused by NIL deals and players frequently transferring schools.
On the technical side, Jacobs pointed out how Fox Sports, where he got his start, changed the way we watch sports by introducing on-screen graphics like the yellow first-down line. He sees a need for the NBA to further innovate how games are broadcast, stating, “The NBA has a long way to go in changing how it looks and feels on TV.”
The Challenges and Ethics of Youth Sports
Both Jacobs and Rodriguez touched on the ethical concerns surrounding the youth sports business. Many families stretch their finances to give their children opportunities, with little chance of a professional career at the end of it. Jacobs remarked, “I know a family in South Florida...the mother sold her car, mortgaged her house three times, just to give her son a chance.” Both emphasized the need for more affordable options and programs to support families who can’t afford the high costs.
Jacobs also discussed the social impact, suggesting that teams like MLB could invest in state-of-the-art facilities in inner cities to make sports more accessible. This, he believes, could rejuvenate interest in sports like baseball among younger, more diverse populations.
Final Thoughts: Betting Big on Youth Sports
As youth sports continues to grow into a multibillion-dollar industry, investors like Jesse Jacobs and his partners are keen to create premium experiences for families. While the economic opportunities are vast, they are also mindful of the broader social implications, aiming to build a more inclusive and accessible environment for all athletes.
In the words of Jacobs, “Build a great business, and the rest will take care of itself.”
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