Community Focused ALLCITY Raises $12mm to Capitalize on Local Sports Media Shift

Community Focused ALLCITY Raises $12mm to Capitalize on Local Sports Media Shift

ALLCITY Network –a digital sports media entity with five city-focused outposts (DNVR, PHNX, CHGO, PHLY, DLLS)– recently closed on a $12mm Series B investment round led by TEGNA.

The company is trying to fill a gap in informed, daily, local team coverage, which was once occupied by newspaper columnists, radio hosts, and television talent. 

“In Dallas, there wasn’t even a full-time Stars beat writer in the market [before we got there],” Brandon Spano (co-founder and CEO, ALLCITY Network) said.

Each of ALLCITY’s ‘local networks’ provides fans in the market with a steady stream of conversation and analysis about their favorite teams via written content, video podcasts, and discord channels. And they bring the ‘community’ element to life with a series of live events.

"Our mission is to become the center of the sports fans’ experience," Spano said. "We try to create a flywheel where fans can be connected at all times, in terms of what they read, watch, listen to, and wear, and where they can interact in person with one another and the talent."

More than 500 Chicago Bears fans paid to attend CHGO’s live 2024 NFL Draft show/party.

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ALLCITY Network (ACN) is not your typical venture backed company. At least, it didn’t start out that way.  

Spano was a local media advertising solopreneur selling radio, TV, and print spots in 2015 when he realized the need to supplement his portfolio with digital assets. Rather than align with SB Nation or Bleacher Report, which had established large team-specific followings, he and co-founder Ryan Koenigsberg decided to underwrite an effort to populate a website and series of social accounts, each dedicated to one of Denver’s sports teams, with the context and analysis often missing on fan-authored networks.

“We started with six full-time people and each one [covered] a different club in the market,” Spano said.

The company rolled out team specific pods the following year to provide fans in market with an alternative to the hot takes and national coverage that had been increasingly filling the local sports talk airwaves. Its early success moving radio and TV ad clientele into the digital realm sparked conversation about replicating the business model in other cities.

In fact, what is now ACN, was six years into its existence before the company expanded into a second city (Phoenix) and subsequently decided to take on outside capital. Spano & Co. raised $2.8mm in an oversubscribed 2021 seed round to build out a broader advertising-backed, local, audio and video sports network.

But by the start of ’23, the sportsbooks it was counting on to buy those spots began tightening their reins on spending. ACN was forced to begin diversifying its business model to offset a revenue stream that had been responsible for 70% of its income up to that point.

“And that's when we started to see a lot of top line growth,” Spano said. “We literally had a monthly increase in revenues for 10 months straight, from February to December ’23.”

The potential for a scaled platform had become obvious. 

“There’s a big shift in local and regional sports media coverage and we’re on the other side of the paradigm,” Spano said. That presents “all kinds of opportunities [for us] to take market share from struggling –and in some cases shuttering– RSNs, newspapers, and sports talk radio stations across the country.”

For context, the top sports talk station in a major market will typically generate between $12mm and $40mm annually (depends on team rights, licensing deals etc.). 

Mosaic General Partnership saw the opportunity and led ALLCITY’s $9.3mm Series A round last November.

Since then, ACN has only gotten better at both producing (every market has 6-10 hours of live programming/day) and monetizing its content and community (think: direct and programmatic ads, subscription membership offerings, and merchandise sales).

PHLY, its fourth market, was cash-flow positive by the end of its eleventh month. 

While live events (think: tailgates, watch parties, golf tournaments) contribute positively to the top line, they are the ‘connective tissue’ that differentiates ACN from other team focused-media channels and ultimately makes its model work.

“It’s where this digital network becomes reality and the people become real,” Spano said.

The company has a bar in Denver that serves as ‘the sports mecca’ within the city. It has become a gathering spot for the DNVR community.

ACN's audience is sizable and growing (unlike some of the channels it is taking revenue from). 

“Our last Bears postgame show did 50,000 views on YouTube alone, on top of ~30,000 podcast downloads,” Spano said.

The company estimates that 670 AM The Score in Chicago likely only serves ~300,000 unique fans each month.

While every show’s audience isn’t that big, the aggregate across the network is now large enough that ACN can compete for radio and TV ad dollars in individual markets.

ALLCITY plans to use the capital raised to expand programming distribution and launch two more markets. 

“Our biggest development right now is FAST,” Spano said. “We just launched Roku channels in Chicago and Philly, and all five of our ‘local networks’ will be on Samsung too. We expect to have local sports channels on every major FAST platform within the next six months.” 

From there, look for ACN’s focus to shift to linear television. Remember, TEGNA owns 64 local media stations in 51 markets, and is the single largest owner of ‘big four’ affiliates amongst the top 25 markets.

ACN should, at least in theory, be able to help serve broadcast subscribers in locales where its investor has reach (think: Denver, Phoenix, Dallas).

ALLCITY’s revenue opportunity varies based on market size (along with media values). However, the expectation is that most of its fully mature ‘local networks’ should generate between $5mm and $15mm annually. 

Each is expected to cost between $1mm and $3mm to stand up and operate.

ALLCITY “would like to be in 30 markets in the next 5 years,” Spano said. “That would create a pretty big business.”

Established sports digital media companies have historically traded at 4-6 times trailing twelve-month revenues. So, while ACN did not start out as a venture play, those backing it now see a path to venture-like returns.

It’s worth mentioning that the company would likely have to raise another $20mm-$30mm to expand into 20+ additional cities in a timely manner.

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