Wasserman Media Group, the Los Angeles-based sports media firm that offers a range of services from digital advisory to brand consulting, received a $100 million injection from Madrone Capital Partners, according to the Sports Business Journal — the second investment the sports and entertainment powerhouse has taken since inception.
Wasserman Media Group was founded in 2002 by Casey Wasserman, an investment banker turned sports agent and entertainment executive. Wasserman Media Group has grown through a combination of strategic acquisitions and strong executive leaders, including Arn Tellum — one of the industry’s most influential sports agents and the basis for the HBO series Arli$$ starring Robert Wuhl.
Headquartered in Menlo Park, Ca., Madrone Capital Partners is a private investment firm linked to the heirs of Sam Walton, legendary American businessman and founder of Wal-Mart. According to its CrunchBase profile, Madrone Capital Partners has made investments in companies ranging from solar energy providers to dynamic design glasses. Madrone also holds a sizable $500 million stake in Hyatt Hotels Corp.
Madrone’s investment bought it a seat on Wasserman’s Board of Directors with Wasserman still remaining the majority shareholder of the company, according to the Sports Business Journal. Given Wasserman Media Group’s standing as a privately-held LLC, it is not known what valuation Madrone’s investment places on the company.
THE RIGHT PARTNER
The $100 million infusion adds serious artillery to Wasserman’s war chest and allows the firm to continue an aggressive growth-by-acquisition strategy that can net new athletes, agents, distribution, markets — all of the above.
Fielding an investment from a family-owned fortune like that of the Walton’s typically comes with longer time horizons compared to traditional private equity firms that launch funds with 5-10 year lifespans. Family fortunes, on the other hand, are meant to survive through generations while preserving capital and creating income.
Last year, Wasserman bought out its previous investment partner — private equity firm Highbridge Capital Management — that invested $25 million in the company in 2012.
All told, Wasserman scored big on its newest partnership. The firm quadrupled the amount of capital to play with ($100 million versus $25 million) and entered into business with an investment partner free from most time constraints. With such leeway, Wasserman can drive return on capital over longer periods — an area in which Wasserman Media Group, judging from the firm’s considerable growth over the years, appears quite proficient.