Category: Legends News

Club announces partnership with investment group Sixth Street as part of efforts to diversify revenues

Real Madrid has struck a €360mn deal with investment group Sixth Street and US sports entertainment group Legends to develop concerts and other events at its Santiago Bernabéu stadium and diversify its revenues.

The deal, which will be announced on Thursday, injects fresh cash into Spain’s best known football club as it recovers from the financial damage inflicted by the pandemic.

It also demonstrates the ways football clubs are attempting to increase revenues as the cost of buying and paying top players continues to rise.

Real Madrid is in the process of installing a retractable roof and pitch in its 81,000 capacity stadium. This will be completed next year and allow it to host concerts and other events at the venue.

Legends was formed in 2008 by owners of the New York Yankees professional baseball team and the Dallas Cowboys American football team to help venues develop live events. Sixth Street, which manages more than $60bn in assets, took a majority stake in the business last year.

The Bernabéu stadium lags major US sporting venues for the amount that fans spend per visit. Legends will work with Real Madrid to try to improve this, including by enhancing its VIP hospitality and the club museum.

As part of the deal, a new company will be set up to manage the stadium and the proceeds from the new business will be split 70 per cent for Real Madrid and the rest to Sixth Street. The agreement will run for 20 years.

“The transformation of the Santiago Bernabéu stadium will be a turning point in the history of Real Madrid. This alliance . . . will be fundamental in providing unique experiences in a stadium where multiple events can be hosted throughout the year,” said Florentino Pérez, the billionaire tycoon who is president of Real Madrid.

Real Madrid weathered the pandemic better than many of its European rivals, posting combined net profits of around €1.2mn across the 2019/20 and 20/21 seasons.

Next weekend, it will play England’s Liverpool football club in the Uefa Champions League final, the most prestigious club competition in Europe, with €15.5mn guaranteed regardless of the outcome and a further €4.5mn at least for the winner. Overall, each club stands to earn in the region of at least €100mn from the tournament as a whole.

Real Madrid has already won the Spanish league this year.

The club has clashed repeatedly with Spain’s top domestic league La Liga over the sport’s financial future. Pérez is among the main advocates of a new European Super League for the region’s top teams, although the project rapidly collapsed after its unveiling in April 2021, because of opposition from rivals, fans and politicians.

Pérez also tried to derail a deal between CVC Capital and La Liga, under which La Liga handed the private equity group a slice of its future broadcast and media rights over 50 years in exchange for €2bn.

Real Madrid is being advised by Key Capital and Sixth Street is working with JPMorgan.

The Buffalo Bills have hired Legends to lead project management, sales and partnerships for the new NFL stadium to be constructed in Orchard Park, N.Y. Legends started working with the Bills a year ago to help the team explore stadium feasibility and has been handling e-commerce for the team for about the same period of time.

“Why are we working with Legends? They’re the best,” said Ron Raccuia, Bills executive vice president, in a phone call. “We interviewed everyone, left no stone unturned. At the end of the day we felt best about their technical expertise, their strategic vision and a personality that fit best with us.”

The Bills are planning to replace their 48-year old stadium with a new facility nearby that will be jointly financed by the team, Erie County and New York state. Taxpayers will kick in at least $850 million toward the stadium, probably two-thirds of the total cost.

Legends has been involved with the planning of numerous arenas since its founding in 2008, including recent NFL facilities in Los Angeles and Las Vegas. “We’re proud of the fact we’re the go-to for these very important projects for one of the most important leagues the world,” said Legends CEO Shervin Mirhashemi, in a phone interview. “There’s a reason for that: There’s expertise and an acumen that we bring to the table about how these projects work, what their life cycles are and how you monetize them.”

The Bills and Legends have already held focus groups with fans and conducted surveys to help in planning, according to a release scheduled to go out later this morning. In addition to arena design, Legends will assist the team in selling seat licenses, naming rights and “founding partner” arrangements. “It’s been a data-driven approach, using our feasibility business and our data analytics business to help them formulate what is consumer demand—what are they looking for?” added Mirhashemi.

Since it’s early in the design process, there aren’t a lot of decisions yet settled about the stadium, but the club hopes to incorporate some features that work well in other NFL venues as well as elsewhere, said Raccuia, citing London’s Tottenham Hotspur Stadium and LAFC’s MLS stadium as examples.

“We have a unique opportunity to build a football stadium for the Buffalo Bills and for our community, without having to worry about everything else,” Raccuia said. “We’re not hosting Super Bowl in our stadium, we’re not looking to be the driver for economic revitalization—we’re looking for the best football experience we can create. The best thing we can do for western New York is to win football games and create an unbelievable atmosphere in our community.”

The Bills, purchased by Kim and Terry Pegula in 2014, play in one of the smallest markets in the NFL, and Raccuia hopes the new bowl can provide an example for other small market NFL franchises. The team won’t pursue mixed use real estate development, as other teams have done (in part because New York will own the land and facility), but the team will support any related efforts, he added.

Legends was founded as a joint venture of the New York Yankees and Jones Concessions LP, an affiliate of the Dallas Cowboys. The business has evolved to incorporate strategic planning, marketing, commerce, branding and technology solutions for sports teams and non-sports businesses, such as Freedom Tower’s One World Observatory. Last year, Sixth Street Management bought control of Legends at a valuation of $1.35 billion, with the founding teams retaining sizable minority stakes. More recently Legends has been increasing its business outside the U.S., recently being named part of a redevelopment team for Manchester United’s Old Trafford.

“We’ve really been true to who we are,” Mirhashemi said, “humbly being an expert to help these projects achieving what they’re fully capable of achieving, and doing it in a white-label way, putting the client brand at the forefront.”

The National Football League’s Super Bowl LVI followed up a strong domestic media showing with record-setting hospitality totals.

Legends, the league’s official retail merchandise concessionaire for Super Bowl LVI, said that it generated per capita spending of $167.37 (€147.25) across concessions, premium dining, and merchandise sales, marking the highest such figure for a full-capacity Super Bowl. 

Last year’s Super Bowl LV in Tampa, Florida, generated a comparable spending average of $212, marking an overall event record. But that game was limited to about 25,000 attendees, less than half the capacity of Raymond James Stadium, due to the Covid-19 pandemic. 

The total for Super Bowl LVI, a comeback victory for the Los Angeles Rams, beat by 14 per cent the prior full-capacity mark of Super Bowl 50 six years ago in San Francisco, California.

Legends is the concessionaire at SoFi Stadium, home of the Rams and Los Angeles Chargers, and the company in 2020 completed a deal with the NFL to handle event merchandise for the league’s marquee events including the Super Bowl, Pro Bowl, and Draft.

Overall, Legends generated more than $18m in revenue for nine days of activities this month that included the Pro Bowl in Las Vegas, Nevada, the run-up to Super Bowl LVI, and gameday itself on February 13. In addition to selling merchandise on site at SoFi Stadium and Allegiant Stadium, Legends also managed the official merchandise shop at the Super Bowl Experience fan attraction in downtown Los Angeles, and pop-up and hotel locations around the city.

“Our team was incredibly proud to be a part of Super Bowl LVI, turning up the spotlight on Los Angeles and celebrating the diverse culture of the area through our food and beverage program at SoFi Stadium and unique merchandise partnerships with local artists,” said Dan Smith, Legends Hospitality president.

“The buzz around the game and the city was incredible, with the home team playing and back to a full-capacity Super bowl. Our team worked around the clock to ensure an expedient, first-class experience for fans inside the stadium and at the retail locations throughout the city,” Smith said.

In addition to an early-arriving crowd for the game, the totals were also boosted by more than 900 concession points of sale at SoFi Stadium between fixed and handheld locations, with temporary locations such as portable trailers installed to help manage the heightened demand. 

Since graduating from the University of Virginia in 1991, Gabby Roe has devoted his professional career to launching, helping lead and consulting for niche sports properties. Roe’s experience includes founding a beach soccer league, serving as an executive for Major League Lacrosse and the AVP beach volleyball league and running his own sports consulting company for the past 10 years.

That firm, Maestroe Sports & Entertainment, has worked with dozens of clients to achieve and exceed their business objectives. And now, Maestroe is taking the next step in its evolution, as the company has been acquired by Legends, a company founded in 2008 by the New York Yankees and Dallas Cowboys that initially focused on running the concessions at their stadiums and others at sports venues and entertainment complexes.

Since then, Legends has grown to become a major advisory firm working with clients in professional and college sports and entertainment, helping them with business plans, sponsorship sales, arena naming rights deals, merchandising and other areas. Last year, Sixth Street, an investment firm with $60 billion of assets under management, acquired a majority stake in Legends in a deal that valued the company at $1.3 billion. The Yankees and Cowboys continue to hold a significant minority stake in Legends.

Mike Tomon, the co-president and chief operating officer of Legends, would not disclose financial details of the Maestroe deal. But he said the addition of Maestroe helps Legends expand into what he calls “growth” sports leagues that are in their early stages or have the potential to become a bigger part of the industry. As such, Legends has launched a new division, dubbed Legends Growth Enterprises, that will be led by Roe.

The division will continue to work with Maestroe’s existing clients, which include the International Axe Throwing Federation, Spikeball, USA Pickleball and Karate Combat. It will also pursue other sports clients as well as those in the entertainment industry.

“The underpinning (of Legends) has always been about growth for our clients,” Tomon said. “As we looked to further expand that approach, we saw Gabby and Maestroe as uniquely positioned to not only further that but to be a key differentiator on how they approach some of these earlier stage opportunities. As Gabby likes to coin them, they’re the tech stocks of the (sports) business.”

Roe describes Maestroe as “the unofficial but self-proclaimed flag-bearer of these emerging sports properties” that are overshadowed in the United States by the NFL, NBA, NHL, Major League Baseball and other established leagues. The company’s work through the years has included helping new leagues get off the ground with their business plans, helping leagues secure venues and media rights deals and aiding with sponsorship sales. 

A few months ago, Roe was talking about a new sports league with Shervin Mirhashemi, a longtime friend and the chief executive of Legends. The two had those types of informal conversations on a regular basis, but this time Mirhashemi brought up the idea of Legends acquiring Maestroe.

Roe said he was not looking to sell the company and had not hired an investment bank to pursue suitors. But the more he spoke with Mirhashemi, the more the idea of a sale made sense. By becoming part of Legends, Maestroe will expand their capabilities in sponsorships and other business lines while expanding to areas where they had not been active, including data and analytics and merchandising.

The new Legends division may also acquire equity stakes in up-and-coming sports leagues, something Maestroe had not previously done.

“I have loved and respected the Legends brand since it was launched,” Roe said. “It’s a dream come true for me to be able to join up with Legends and Shervin and Mike Tomon and the whole team.”

He added: “We see ourselves as the advocate for these (niche sports). Even more than the personal side of it, it’s showing these emerging sports are real and there’s a place for them in the sports hierarchy. We’ve been sticking up for the little guy for many years. It’s nice to have a large, extremely reputable company (in Legends) that believes alongside of us and is now going to pump as much of their expertise and resources into these sports properties. I think it’s awesome for the industry.”

The Maestroe acquisition is the latest deal for Legends. Late last month, the company announced it had bought 4FRONT, a data and analytics and digital media firm whose clients have included the UFC, Chicago Bears and New York Mets. Tomon noted that Legends will use 4FRONT’s technologies and capabilities to help clients that Maestroe has worked with and attract new business. He also expects Legends will complete more deals in the coming months, as well, thanks to Sixth Street’s investment.

“(Sixth Street) brings a ton of strategic and financial wherewithal to ultimately help the growth of the business,” Tomon said. “We are in growth mode. But we’re really focused on the right type of growth, to make sure it’s strategic and fits in with the overall vision. We’re aggressively pursuing that.”

Global sports and entertainment advisory company Legends has bought data analytics and digital media company 4Front. Legends’ Global Technology Solutions division will now be headed by 4Front co-founders Josh Kritzler as its new co-president and COO, and Dan Migala as co-president and CRO.

4Front brings with it a long list of customers in the sports world, having consulted with Chelsea FC, the Chicago Bears, New York Mets, Oklahoma City Thunder and the NCAA. Legends has provided technical solutions for major venues across the sports world, including SoFi Stadium, Yankee Stadium and AT&T Stadium. The company’s solutions span venue management, ticket sales and fan experiences.

Legends partnered with the Professional Fighters League last year and received an equity stake in the league. Legends will oversee sponsorship, ticketing sales and venue operations for the league, as well as help develop a training venue.