Eli Manning’s firm buys RCX in youth sports push

Eli Manning’s private equity firm Brand Velocity Group is buying RCX Sports, extending its reach into league-backed youth sports programs, CNBC reported. The deal puts Manning’s firm behind the operating partner for youth programs tied to the NFL, NBA, WNBA, MLS, NHL and MLB.

CNBC reported that financial terms were not disclosed. RCX has about 150 employees and generates revenue by distributing uniforms, equipment and other sports products, as well as by servicing local parks and recreation centers.

RCX runs or supports several programs that are familiar to many families with young athletes, including NFL Flag, Jr. NBA, Jr. WNBA, MLS GO, NHL Street and MLB Pitch Hit & Run. RCX CEO Izell Reese told CNBC that NFL Flag has about 1 million children involved and is the largest youth sports league in the world.

The acquisition is backed by a group of investors that includes current and former athletes, CNBC reported. The group includes Emmitt Smith, Larry Fitzgerald and Jameis Winston.

Private equity firms have shown growing interest in youth sports, a field CNBC described as fragmented and supported by repeat seasonal fees. CNBC reported that some investors see room to combine smaller leagues, apps and services while reducing overlapping back-office costs.

That investor interest has also drawn political scrutiny. In May, Democratic lawmakers introduced the “Let Kids Play Act,” a bill that would bar some private equity investment in youth sports, according to CNBC.

U.S. Rep. Chris Deluzio of Pennsylvania and Sen. Chris Murphy of Connecticut unveiled the bicameral bill. In a statement cited by CNBC, the lawmakers described youth sports as a $40 billion industry and said private equity firms were focused on extracting profit from families. Murphy said in the statement that, as a hockey dad, he had seen private equity companies “rip families off.”

Manning told CNBC that Brand Velocity Group’s plan for RCX is centered on expanding participation and keeping costs down. He said the professional leagues involved in the youth programs want more children playing sports and staying active, rather than creating a high-cost system.

“Our goal is to bring in capital so they can scale that, they can expand that,” Manning told CNBC.

Manning has been an advocate for flag football and has helped coach his daughters’ teams, according to CNBC. He told CNBC he wants flag football to become a sanctioned high school varsity sport for both girls and boys, and said the sport does not have to serve only as a path toward tackle football.

New Jersey became the 18th state to sanction girls’ flag football as a high school sport last month, CNBC reported. Getting boys’ flag football sanctioned may be more complicated, CNBC reported, because tackle football coaches could object if top players choose flag instead.

Reese, a former NFL safety who played for the Dallas Cowboys, Buffalo Bills and Denver Broncos, told CNBC that flag football can operate across more than one season. He said that gives tackle players a way to work on football skills and gives other children a chance to play flag football on its own.

This story draws on original reporting from CNBC.