He’s a big guy, George Pyne. Making his way through the
central London hotel restaurant where we meet he’s a head taller and a lot
broader than anyone else. But then his father, grandfather and brother were all
NFL players, so perhaps it’s to be expected.
We’re here to talk about Bruin Sports Capital (the name he
chose when it was just “me and a telephone” is surely not accidental), the global
sports marketing and investment firm that Pyne launched in January 2015, having
left IMG, where he was president of IMG Worldwide Sports and Entertainment, in
the wake of its takeover by WME, the Hollywood talent agency.
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Bruin launched with $500 million in buying power, about one-third of which was provided by a syndicate that includes WPP, the UK-based advertising giant, and the rest through equity funding. Since then the company has made three major investments, entering the European market most recently with its acquisition of Deltatre, the international sports media services company, almost a year ago, in a deal worth in the region of €145 million ($161 million at the time).
Bruin also owns hospitality company On Location Experiences
and experiential marketing specialists Engine Shop, and co-funds Courtside
Ventures, a $35-million investment firm targeting technology and media start-up
companies involved in sport, together with other investors including WPP and
Dan Gilbert, the majority owner of the NBA’s Cleveland Cavaliers and founder of
Quicken Loans, the mortgage lending company.
If you’d told me two and a half years ago this would be where we’d be, I’d have been very pleased with that result
From that ‘me-and-a-telephone’ start at the beginning of
2015, Bruin has grown to 11 employees, while its ‘portfolio’ companies, as Pyne
calls them (the companies it has invested in), comprise a total of 1,100
employees and 24 offices in nine countries, which he describes as “pretty good
progress,” adding: “When you look back on the last two and a half years, we’ve
been pretty busy and developed real scale with a portfolio of companies. If
you’d told me two and a half years ago this would be where we’d be, I’d have
been very pleased with that result.”
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By GlobalDataSeven out of 14 offers Bruin has made to acquire companies or parts of companies have been accepted (a “high average,” Pyne claims), but he’s reluctant to talk about Bruin’s buying power now, although I understand that it has made at least one (unsuccessful) offer worth several times the original $500 million. “It was important to highlight [the $500-million figure] early on, so people knew we were real,” Pyne says. “Teddy Forstmann [who owned IMG when Pyne worked for it] used to say it’s important to say the capital you have access to.
“Today where we are, we have access to all the capital we
need to take advantage of the opportunities in front of us. We’re not limited
by capital. In the last year we made offers well beyond the capital we had
committed. We have access to long-term capital from wealthy families and WPP.
That means we can punch above our weight.”
The reference Pyne makes to the late Forstmann, who suffered an untimely death in 2011, seven years after his private equity company Forstmann Little acquired IMG, is one of several in the course of the interview. It’s clear that he, along with Roger Penske, the legendary IndyCar and Nascar team owner, were formative influences in Pyne’s business career (Pyne worked for Nascar for over 10 years, latterly as chief operating officer, until joining IMG in 2006).
Courtside has already made 18 investments ranging in value
from $200,000 to $1.5 million, including the interactive live-streaming
platform Beam, which was bought and then sold on to Microsoft within 120 days
for a multiple of several times the amount Courtside paid. Courtside gets
“probably three or four overtures a week, which is almost overwhelming,” Pyne
says.
So how does he describe what Bruin does? Is it a venture
capital company for sport? “Venture capital to me means more early-stage and
more high-risk, which is not how I would describe Bruin,” Pyne replies. “We’re
more middle-market. Courtside is closer [to a venture capital company], it’s
much more early-stage. But we’re one of six investors in Courtside. Venture
capital is not appropriate for Bruin. We’re a capitalised operating company.”
But does Bruin aim to buy companies, add value and sell them
on at a profit, in classic venture capitalist style, I persist? Everyone asks
him that, Pyne replies, but he won’t be drawn. “The answer is, we have
long-term patient capital and we’re trying to build businesses,” he says. “That
doesn’t mean we wouldn’t sell an asset if it realised value, but it does mean we’re
not all about the exit; we’re about building something great and making a
difference in the world.
“Courtside is a different animal. Those are early stage
companies which are constantly looking for growth capital. You can’t put them
in the same category. Beam, which we sold to Microsoft, was led by a very
talented and young entrepreneur who realised success on that investment in 120
days. For us, that was remarkable. But in investments like that, we’re one of
six or seven co-investors.”
Looking back at his commercial life, Pyne says, one constant is that the moves he made were all predicated on the question: “Does something have growth potential? In 1990 I moved to Atlanta for the [1996] Olympics. I saw growth potential in Nascar in 1995 and in IMG when I moved there in 2006.”
Similarly, “We have a broad mandate of sports, entertainment
and media, but the first thing I look for is growth capabilities,” Pyne says. “That
can come from [market] segments: for example, with Deltatre there are a lot of
changes going on in media. I thought I would love to find a company that put me
in the middle of that change. It’s a growth segment. They’re at the forefront
of that from a technical point of view.
“It’s my lifelong ambition to be in the middle of channel change.
You have to recognise it’s not an easy place to be, but Deltatre is a reliable
partner of some of the world’s biggest federations and broadcasters, they’re
very good at what they do and also very dependable. They provide a high level
of services for some of the biggest events in the world: the [Fifa] World Cup,
Olympics, [Uefa] European Championships, Twenty20 cricket, the IAAF world
championships…”
The Milan-based company is also expanding its activity in the Americas, targeting new business with leagues and broadcasters in the region, after Claude London, a Google executive, was recently appointed to head up a new division there.
Pyne says: “In the next couple of weeks there will be interesting activity regarding Deltatre in USA; and also in Asia and Europe. I’m very bullish on the company. They’re people that understand sport and technology. They understand both, not one or the other. They really offer value to both federations and broadcasters and their DNA is the love of sport. They started out in linear TV and moved to digital; but they still do things in linear. They understand sports media through all channels of distribution.”
Not all investments Bruin has targeted have come off, of
course, as the 50-per-cent strike rate Pyne boasts of implies. “You might not
find the growth potential you thought was there, or you may not be able to
agree on price,” he explains. “You also want to make sure you believe in the
management.
“We’re well suited for someone with a long-term view, who is not as concerned with every last penny. If you’re looking to sell to the highest bidder, and the sole purpose is money, we’re probably not right for you. But for people that want to sell a company and stay on, we’re a very friendly place. I want to back, empower great leaders, people who want to do things they didn’t have the chance to do before. Deltatre will be able to do things in USA that they might not have been able to do before. That adds real value to that company.”
Pyne also saw growth potential in On Location Experiences, the hospitality company previously known as NFL On Location, which Bruin acquired from the NFL in its first major deal, and which in turn last year acquired Anthony Travel, the agency specialising in packages for amateur and collegiate sports events.
“We brought capital and enhanced management,” he says. “It was underdeveloped. It’s now much broader than what we started with. At this year’s Super Bowl it put on live music events for 27,000 people, 9,000 people a night [artists included Taylor Swift]. It was the ticket event at Super Bowl everyone wanted to go to. It also hosted 14,000 people and provided hospitality for a Super Bowl party and it organised pre- and post-game parties for the Patriots and the Falcons. It also promoted a college football game in Dublin, Ireland and has a company, Kreate, that does work for Disney. When I look at On Location now, it does work for many other federations and offers a vast array of services that didn’t exist two years ago.”
What “I did right,” Pyne argues, all came from identifying
“things with a real chance to grow.”
So what has he done wrong since launching Bruin? Are there investments he chose not to make that he has later regretted? “Sure,” he says, “every once in a while you say, ‘Jeez, I missed that or wish I’d looked at it differently’. One thing I didn’t know was how many opportunities are out there. Unfortunately, if I’m being honest, you miss some.”
For the first half of this year, Pyne contends, Bruin has
been “more focused on helping grow value” in its existing investments. However,
he adds, “There are two or three new projects that could turn into something
meaningful that happened as a result of inbound calls. There’s still a pipeline
of opportunities. You’re likely to see activity in the second half of the year.”
Asked if Bruin’s investments have typically resulted from
its own approaches or from those it has received, he says, “You kind of want to
do both. Outbound calls are more interesting because they’re unique and different,
but inbound are not bad either.”
You have to have a vision for what you want to do with your company and be able to explain, not only where the company is today, but the opportunity for tomorrow
What can companies do to make themselves attractive to
potential investors like Bruin, I ask? “You have to have a vision for what you
want to do with your company and be able to explain, not only where the company
is today, but the opportunity for tomorrow: to show how one plus one could
equal three or four,” he says. “There also needs to be an understanding of what
you need to execute that vision. In a lot of cases people might be in situation
where they have no access to capital, or other things held them back, but real
value could be created.”
In the case of Courtside, which occupies a “dynamic space of
digital sports technology which is ever-changing,” a weekly process has been
created which Pyne likens to ‘Shark Tank’, the US reality TV show akin to the
UK’s ‘Dragon’s Den’, in which the co-chief executives of the company present
potential investments to a panel of Bruin board members and other industry
leaders.
“They come saying, ‘I have an idea or product that needs investment and then defend the product,” Pyne says. “You’ve got to have a great entrepreneur, and then you need the right idea and you need to be early so you get a proper valuation of the business. All of these things are challenged heavily [by the panel]. You could have the right entrepreneur and the right idea but the terms are out of whack, or it feels too late. It’s very thought-provoking and stimulating and keeps you in touch with what’s going on on the ground.”
Then Pyne adds something interesting. He says that companies
in which Bruin invests also have to be the right “cultural fit. I tell people that
for me at 51 years old, the years between 50 and 60 are when you want to be
with people that have shared values. Life is precious at this stage of the
game, you want to be with people with shared values.”
Is he saying he wants to surround himself with people in his ‘portfolio companies’ that he can be friends with? Or is he simply talking about business values? “Business values are somewhat cultural too,” he replies. “I want people that want to be successful, to compete, but not at any price. People that have a nice way about them.”
So Bruin’s investment targets have to have growth potential,
vision, be in the middle of channel change, not be solely focused on money, and
be led by people that have a nice way about them? That’s quite an exacting list
of criteria.
Pyne was born in September 1965 in the small town of Milford, Massachusetts, where the name George Pyne was widely known and revered. George Pyne II, his grandfather, who died in 1974, played a season for the NFL’s Providence Steam Roller, while George Pyne III, his father, who died two years ago, played for the then Boston Patriots (now New England Patriots) in the American Football League, which merged with the NFL in 1970. His brother Jim played in the NFL for nine seasons for the Tampa Bay Buccaneers, Detroit Lions, Cleveland Browns and Philadelphia Eagles.
Pyne himself played college football for Brown University, an Ivy League university in Providence, Rhode Island, earning All-Ivy League and All-New England honours and serving as captain of the Brown Bears. But he didn’t make the grade for the NFL.
He has the easy, laid-back manner of some big men but, asked if he was disappointed, he says: “Sure. It was my one goal in life. When you grow up in a small town and your dad and grandpa played in the NFL…” He leaves the sentence unfinished, but you can tell it hurt.
“My consolation is to make a living in the sports business,”
Pyne continues. “I love the industry and I’m very grateful. When I was with
Nascar, I wasn’t a car driver per se, but playing sports I really could relate
to the drivers. I have an appreciation of the competitive side of sport. It’s
helpful to me on the business side. I’m very grateful to make a living in this
industry. Having grown up with competitors, I admire the sacrifice competitors
and families make to be good at something. I know how hard it is to be an
athlete, let alone an elite athlete.”
He has the reputation of being a numbers guy, someone who at
both Nascar and IMG could see what needed to be done to add financial value to
the organisations. Is this fair? “I don’t know if that’s a fair assessment,” he
replies. “I do think at Nascar and at IMG a lot of value was created. Did I
play a role in that? I’d say yes, but I was not the only person. We’re builders
and growers [at Bruin]. The key is identifying the things that can be grown.
Teddy Forstmann used to say, ‘Don’t spend time on things that not even Harry Houdini
could grow’.”
So what sports does Pyne regard as having growth potential now? Returning to his roots in motor sport, he immediately identifies Formula 1, since its takeover by Liberty Media and change of leadership from former promoter Bernie Ecclestone to Chase Carey, its new chairman and chief executive, and Sean Bratches, its manager of commercial operations.
“I’m looking forward to seeing the innovation and creativity
they’ll bring,” he says. “Obviously, they’ll look to reinvent digital media [Ecclestone
was widely criticised for neglecting this topic], engage consumers differently and
provide unique opportunities for brands to examine territories and opportunities
for growth.”
In a world that is more and more fragmented, sport provides a platform that aggregates people around a common theme
Pyne continues: “The other thing to look at is the
globalisation of sport: the English Premier League ratings on NBC, Uefa, and
what it’s able to do with its media rights, also the NFL’s four games in
London. The globalisation of sports is interesting and something we all can
watch. We’re seeing the biggest reduction in cable subscriptions in history and
digital surpassing linear with advertisers. The globalisation of sport is resulting
in changes in media consumption. The IOC is building a channel. The world’s
changing and it provides opportunities also for smaller sports. Take a sport
like sailing. You’re now able to track currents and winds digitally and that allows
viewers to experience it in a way they couldn’t before.”
What is it about sport, amid all this change, that remains so attractive to brands, I ask? “Sport is a statement of who you are and what you stand for,” Pyne replies. “It’s unlike anything else, in that it’s generational and involves the local community. It provides an incredible opportunity for brands, it really reflects society. It’s reality TV times 10. There are winners and losers, people who disappoint you, then achieve great things. It’s all colours and religions, it’s a great equaliser. To be part of that narrative for a brand: what’s more compelling than that? In a world that is more and more fragmented, sport provides a platform that aggregates people around a common theme.”
What is Pyne’s ultimate ambition for Bruin? “I would like
people to look back and say we built great companies and we did it the right
way,” he says. “We were good people to deal with. I always admired Roger Penske
in auto racing. He came from sport, but was a business guy. He’s one of those clean-cut,
hard-working good people who do things with honour and integrity.”
And what does he think others in the sports industry think of him? Pyne hesitates, evidently more comfortable talking about sport and his companies than about himself, before replying: “I like to think that if we tell you we’re going to do something we’re probably going to do it. Values mean a lot to me. If you look at a guy from Massachusetts who went to Brown and couldn’t say his ‘Rs’ but became chief operating officer of Nascar and joined the board: you can’t do that unless people can relate to you, trust you. Not a perfect guy, but tries hard and has some values.”
