Private equity’s move into youth sports brings some truths home - Financial Times

Private equity’s move into youth sports brings some truths home

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Private equity’s move into youth sports brings some truths home

Investments create benefits but also lead to higher costs and risk of inequality

* Sujeet Indap
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!Thomas Carr of York is checked by Cape-Yarmouth players Caleb Morrison and Spencer King during a boys hockey semifinal.

*The children’s sports marketplace is now valued at $40bn, with parents spending on average $1,000 a child

© Ben McCanna/Portland Press Herald/Getty Images*

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Sujeet Indap

Published8 hours ago

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

For some of my cold-blooded business school classmates, their nascent scepticism about private equity comes from perhaps an unlikely source: the Wall Street takeover of the sports their kids play.

To support their children in their athletic endeavours, they have faced new and escalating costs for everything from fancy uniforms to being pushed towards video recordings of games, the latter costing parents hundreds of dollars when they could just use their own iPhones. Parents tell stories of being charged to watch games, to have their child try out for teams or pay for parking at matches.

And it is not just pursuits that have traditionally been for the well-heeled that have been targeted — the monetisation trend is now spreading across sports and so are the concerns.

Chris Murphy, Senator for Connecticut, wrote an essay early this year complaining about his teenaged son’s hockey league, describing the private equity firm behind it as attempting “to make a grotesque amount of money”, adding “kids’ sports is a cut-throat business, a way to make a handful of people very rich”. Murphy and several other members of Congress have since introduced legislation to “kick private equity out of kids’ sports and stop the rip-offs”.

One former business school classmate told me the backlash was about Gen X “nostalgia” for our childhoods when soccer or baseball was organised largely by municipal parks departments, YMCAs or mom-and-pop local enterprises.

Those days are over, like it or not. Something like 30mn American children now play some form of organised sport and the arrival of big money has added to a broader debate about American capitalism, social equity and even the innocence of childhood.

!Young Philadelphia Phillies fans stand behind netting as one girl holds a baseball, waiting for an autograph before the game.

*The backlash against private equity’s monetisation of children’s sport stems from nostalgic memories of games being organised by parents or local municipalities

© Hunter Martin/Getty Images*

Youth sports is now a big enough marketplace that the consulting firm LEK recently published a detailed industry map for potential in