New firm focuses on sports as business

A team of sports industry all-stars has launched a new growth capital firm with a game plan to raise an institutional buyout fund within the next year. New York-based Accrue Sports and Entertainment Ventures launched last month with an initial $5 million to $10 million in commitments to invest in media and technology companies catering to sports fans.

The new firm raised seed money from a group of strategic investors, including Tom DiBenedetto, a Boston Red Sox minority owner, and Jesse Itzler, founder of Marquis Jet. The firm plans to make two to three investments this year. Following those deals, Accrue Sports intends to raise more than $100 million to buy sports media platforms.

Two of the founders hit a pair of home runs previously in the space. COO Steve Solomon and CEO Bryant McBride created Accrue Sports after investing in two sports-focused online ventures. They backed community site, which was bought by Time Warner’s Sports Illustrated. And they invested in scouting directory Football Scouts Inc., which was sold to ESPN. The two sales notched returns of 4.1x and 8.8x, respectively, for investors.

Although they considered their investments in the two sites to be informal, Solomon and McBride liked the opportunities they saw in the space. They decided to team up with media and sports industry executive Doug Perlman and former buyout pro Paul Levy to start a formal effort. Perlman previously worked with the National Hockey League’s media team and at IMG World. Levy previously worked for Main Street Resources, a lower mid-market buyout firm.

In addition to making investments, the firm will operate a consulting arm designed to facilitate deal flow and generate short-term income, Perlman says. Accrue Sports shouldn’t have trouble scaring up deals; the firm has already looked at 100 investment opportunities, he says.

Accrue Sports expects to take advantage of its founders’ vast Rolodexes of sporting industry contacts. The partners expect that their network will not only help the firm secure vendor relationships, but also facilitate exits, Perlman says. Aside from its founders, Accrue Sports has lined up advisory relationships with familiar industry faces such as Richard Dresdale of LBO shop Fenway Partners; Walter O’Hara of investment bank Allen & Co., and Jeff Seltzer of Pierce Yates Ventures, a venture firm.

Accrue Sports won’t be moving alone in the wide world of sports investing. Louisville, Ky.-based Blue Equity, for instance, has built up a specialty in the sports and entertainment field. Earlier this month, the firm consolidated its media and consulting holdings into an entity known as Blue Entertainment and Sports Television.

In addition, Falconhead Capital, a shop run by David Moross that used to be known as Sports Capital Partners, plays in the sports space. The firm recently rolled up a series of publishing and event companies geared toward extreme sports such as triathlons.

And media-focused InterMedia Advisors has carved out a niche in sports-related investing, having backed a company that provides Web-only footage of Olympics sports, such as track and field. —Erin Griffith