49ers President on Elevate Sports Ventures, Stadium Development and Colin Kaepernick

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The San Francisco 49ers, Harris Blitzer Sports & Entertainment (HBSE), and Creative Artists Agency (CAA) announced the launch of Elevate Sports Ventures. The new company will leverage extensive resources, relationships, and expertise to provide a robust suite of services in areas that include sponsorships, stadium project transformation and marketing. 49ers President, Al Guido, will serve as the company’s CEO. Al was in NYC last week and found the time to meet with JohnWallStreet to discuss how stadiums are going to be built without public funding, teams/leagues entering the venture capital space and Colin Kaepernick. 

JWS: On the surface, it wouldn’t appear those 3 companies (CAA, 49ers, HBSE) would be aligned in their missions. Where do the synergies lie?

Al: You’re right, most outsiders wouldn’t view us as aligned; but innovation is in the DNA of all three companies. The synergy in the rolodex of our firms, is what brought us together. We have over 100 years of experience on our leadership team. We felt like that wealth of experience and the number of verticals (sponsorships, project transformation, analytics, ticket sales, marketing) we touch, could really offer something new to the marketplace. Then you add in the geography footprint; Silicon Valley, the NY base and the London offices that we have.

JWS: Public financing for stadium construction is tighter than it’s ever been and PSL’s have become a tough sale. What can Elevate Sports Ventures do to help to assist teams looking to build a new home?  

Al: I think what you bring up is an opportunity for Elevate Sports. Seat licenses will continue to exist, but if you’re caught up in only one business model to finance projects; you’re going to fail. You can’t just have 10 or 12 games, it doesn’t work. We (49ers) had no public financing for our building (cost: $1.3 billion), so we really had to think outside the box about how we were going to monetize it. We (49ers) partnered with Michael Mina (a Michelin star rated chef) to create our own restaurant concept, we have our own school in the building with 8 full-time teachers on staff, we have a convention center business where we do $15 million in gross revenue in the catered event space and we’ve gone from 31st in the league in revenue to a Top 3 club within 4 years. For us it’s all about helping these brands find ways to fill the gap, because the way we filled the gap before with personal seat licensing; that won’t work anymore.

JWS: Sports teams and leagues are more active in the venture space than they’ve ever been. Why do you think that is?

Al: Sports teams didn’t realize or recognize the power of their brand and what it meant. Our thesis on the venture with the 49ers (40 companies under venture arm) is that there is a lot of technology growing in the sports space. Some of it is in the sports health, safety & player performance space, some of it is in the business or fan experience space (i.e. streaming, mobile apps, ticketing) and some of it is in the operational efficiency space (i.e. security, gate entry). A lot of early stage companies don’t have the capital to write a 7-figure check for a sponsorship, but they can really help your brand; why not partner with those companies, why not take an equity stake and help them from a brand perspective.  

Howie Long-Short: You may not be familiar with the name Harris Blitzer Sports Entertainment, but you’ll recognize their properties; Philadelphia 76ers, New Jersey Devils, Prudential Center and Team Dignitas (esports) among others. The company is owned by Scott Harris and David Blitzer. CAA is also privately-held, but the original ownership group no longer controls the company; in 2014 TPG Capital (P.E. firm) acquired a majority stake (53%, they already had 35%) for $250 million.

Fan Marino: Colin Kaepernick spent 6 seasons in San Francisco, starting 58 games. I had to ask Al, what is the reason that Colin remained unsigned through the ’17 season?

Al: I can’t speak for the league, but we’ve supported him. Our owner put $1 million into the market for social change, we’ve partnered with our 3 local police commissioners; the 49ers won the NFL’s humanitarian team of the year (from ESPN), last year. What we all (teams/league) need to do, is continue to tell the stories of our players outside of on the field performance. Our guys are not just about the 16 games they play on Sunday, they are about the causes they care about.

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Author: John Wall Street

At the intersection of sports & finance.

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