Athletes Unlimited signs Gatorade, Hyperice as sponsors and remains bullish on women’s sports leagues

Haylie McCleney #28 of Team Piancastelli celebrates along with her teammates after their win towards Team Ocasio through the ultimate weekend of the Athletes Unlimited softball league at Parkway Bank Sports Complex on September 28, 2020 in Rosemont, Illinois.

Quinn Harris | Getty Images

Athletes Unlimited (AU) co-founder Jon Patricof instructed CNBC this week that Hyperice and Gatorade will sponsor its volleyball season, which begins on Feb. 27 in Dallas, Texas.

Athletes Unlimited is a sports agency that creates and operates women’s sports leagues. CNBC just lately talked with Patricof in regards to the league’s new sponsors and the way forward for Athletes Unlimited.

Patricof mentioned AU’s mannequin – constructed round women’s sports, together with volleyball – has gained momentum after its softball season, which launched final August. Brand companions achieve extra publicity to a singular fan base outdoors of conventional sports and entry to international markets with AU’s media distribution offers.

“We’re going to be able to bring partners opportunities across sports all year in multiple geographies,” Patricof instructed CNBC in an interview on Wednesday. “And that’s how we’re going to get to scale. And for a partner like Gatorade, which is such a leader in the sports marketing world, to come on board as well is another great signal of some momentum.”

Patricof co-founded AU with Jonathan Soros, CEO of JS Capital Management funding agency and son of billionaire George Soros, in 2019. The firm has star athletes, together with Brooklyn Nets star Kevin Durant and U.S. women’s soccer icon Abby Wambach on its advisory board.

AU runs an expert softball, volleyball and, quickly, a lacrosse league. Female athletes earn a base wage and bonuses based mostly on their group’s success and a scoring syste. At the tip of every season, the main participant is rewarded prime cash from a prize pool.

For its softball season, AU’s says it paid out $1 million in wage throughout 57 gamers who additionally shared a $300,000 pool. The champion, Cat Osterman, a former University of Texas softball standout, took house somewhat over $35,000 (together with base wage and bonuses).

Players aren’t dedicated to 1 group however swap groups each week of a season. Drafts are held on Facebook. Patricof mentioned AU’s mannequin permits gamers to construct profiles for potential branding alternatives. AU’s mannequin is ready up for followers to observe gamers, not groups, all through a season.

“We want to model the success that leagues like the NBA have had with the ability to build the players’ profiles and personalities,” mentioned Patricof, the former president of Major League Soccer’s NYCFC group. “I think that is increasingly important to fans.”

Will the mannequin work?

Patricof added gamers earn royalty-like compensation as the league succeeds. Women who take part in any league are supplied a 20-year pact to share AU earnings after value and bills. Patricof mentioned AU gives gamers with well being advantages and takes on prices related to housing, transportation and meals.

But although Patricof sees an “upside opportunity” with AU’s enterprise mannequin, start-up sports leagues typically battle to safe lasting earnings and normally find yourself with vital cash-flow issues.

Smaller sports companies, together with the Alliance of American Football agency, Arena Football League and the seashore volleyball-driven AVP league, have a historical past of economic troubles, together with a number of bankruptcies.

Patricof confirmed AU will not revenue throughout its 2020 softball season. He would not talk about Soros’ monetary backing and declined to supply different important metrics like subscriptions for its “Unlimited Club” ($19.99), which offer shoppers further entry and digital engagement with gamers and groups.

He defended AU’s enterprise mannequin by pinpointing the agency is cost-effective because it avoids costly capital expenditures that always harm start-up sports leagues. Those bills embody stadium leases, massive roster sizes (payroll), and fixed touring throughout a season.

AU leagues play in a single location. Chicago will host softball once more in 2021, and the lacrosse league will almost definitely play in a mid-Atlantic space.

“We’ve built a very rational and sustainable cost structure which I think was the biggest failure of the AAF and XFL,” Patricof mentioned.

Alyssa Naeher #1 of Chicago Red Stars punches away a unfastened ball throughout a NWSL soccer match between the Chicago Red Stars and the Orlando Pride at Orlando City Stadium on September 11, 2019 in Orlando, Florida.

Alex Menendez | Getty Images Sport | Getty Images

Showing optimism 

AU’s volleyball league has a media settlement with CBS Sports Network and Fox Sports. It will present eight video games on social media platforms together with YouTube, Twitter and Twitch. The softball season had Disney -owned properties ESPN2, ESPN3, and ESPNU as a media companion. The media offers are normally structured as one-year agreements.

One sports banker who spoke to CNBC on situation of anonymity mentioned the community agreements are greater than doubtless cut up income offers with AU. That means networks present free airtime in change for a cut up of advert earnings. The guess right here is AU can develop viewership to realize extra favorable phrases with companions ought to the leagues develop.

Patricof declined to debate viewership stats however mentioned an unbiased auditor decided AU’s media worth for its softball league was $25.9 million. The agency did not present the title of the auditor.

“It’s not the value of the ad spot,” Patricof mentioned. “It’s the value of the integrated marketing, the signage, and everything else we were doing across social media.”

He used the Olympics and the NCAA as fashions AU can emulate with its personal firm, particularly across the storytelling side. AU needs the content material round girls to assist construct its viewers.

“Every four years when the Olympics are on, people are captivated by the personal stories, and NBC Sports does such an amazing job of telling the stories about the players,” Patricof mentioned. “That’s an essential part of what we want to do at Athletes Unlimited.”

Despite the challenges forward, AU is bullish on its women’s sports leagues.

Patricof mentioned free-play video games round its softball league by way of DraftKings have sparked curiosity in AU. He additionally used Wednesday’s announcement of Chelsea Clinton and Jenna Bush Hager’s funding within the National Women’s Soccer League as an indication of constructive development for girls leagues.

Patricof mentioned he is extra optimistic about AU’s future than he was in 2019 when constructing the mannequin with Soros.

“You continue to innovate,” Patricof mentioned. “You continue to challenge the status quo, and you continue to look for opportunities where other people don’t see them. “The momentum is powerful,” he continued. “I believe this a very good second to be working in women’s professional sports.”

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