The PGA of America Has an Investment Fund
EP Golf Ventures was recently launched by the PGA of America.
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Hey Golfers —
Last month — I wrote about the PGA of America’s new facility and its impact on Frisco, Texas. PGA of America CEO Seth Waugh referenced their new home as ‘The Silicon Valley of Golf’ — A big statement.
And the PGA of America is starting to back that statement up with the recent announcement of their new investment vehicle — EP Golf Ventures.
Before we dive into the details — I thought it would be relevant to add some context. The PGA of America is non-profit — 501(c)(6), and its financial information is public.
The PGA of America has its corporate office — they also have 41 sections in 14 different districts. Those 41 sections aren’t included in the 990 filing — each section files its own 990.
Here is a breakdown of the PGA of America’s revenue (not including the sections).
It is worth pointing out — Seth Waugh has an incredible history in the financial space. He spent 10 years as the CEO of the Americas for Deutsche Bank. Seth was a managing director at Silver Lake — a private equity firm. He knows investing.
The PGA of America partnered with Elysian Park Ventures to create EP Golf Ventures. Elysian Park Ventures is the investment arm of the L.A. Dodgers ownership group.
Elysian Park Ventures has invested in several companies in the sports industry — below are a few.
EP Golf Ventures immediately deployed capital into two golf organizations.
Sportsbox AI is a fascinating product led by former LPGA Tour player Jeehae Lee. It leverages AI-powered technology to provide accurate 3D analysis of your golf swing. A golfer can take a video from their phone and turn it into a 3D avatar with six angles.
Sportsbox AI announced it raised a $5.5 million seed round — EP Golf Ventures led the investment round.
Other notable investors in the round.
Michelle Wie West
Dryvebox is an indoor golf simulator company with several locations throughout the United States. But in addition to their physical locations, they have a twist — mobile golf simulators. It’s a solid business thesis. Have a company party? Rent a Dryvebox unit to come to your office.
The golf entertainment space is growing rapidly — some estimates have it growing seven times faster than the total golf market. Dryvebox provides a unique value proposition to traditional indoor golf at a fixed location.
Professional sports leagues creating their own investment vehicle isn’t necessarily new.
In 2013 the NFL created ‘32 Equity’ — the fund has since grown into a $100 million venture fund.
The NFL acquired a 3% equity stake in Fanatics in 2017, valuing Fanatics at $3.17 billion. Fanatics is now valued at $27 billion, and the NFL’s investment is now worth over $800 million and has grown 9x. Fascinating.
The MLB invests in several companies on an annual basis. They are investing anywhere from less than a million to tens of millions. Like the NFL — the MLB is invested in Fanatics. The MLB recently participated in a $15 million Series B round of LeagueApps. The interesting thing? Elysian Park Ventures also participated in this round.
The NFL and MLB invest in organizations that have the opportunity to drive significant value to their product and the consumer.
So what about golf?
The PGA Tour is believed to have invested in several companies — although the details of those investments aren’t made public. But we do know of two recent investments the PGA Tour made.
European Tour Productions
The PGA Tour is leveraging Quintar’s technology for an on-site fan experience. Utilizing augmented reality, fans can point their iPhones toward a select hole, and it will display ShotLink data and 3D models of the greens. The financial details of the minority investment were not made public.
The PGA Tour increased its investment from 15% to 40% in European Tour Productions — valuing the European Tour Productions at $550 million. European Tour Productions is the media arm of the DP World Tour. While this investment was more reactive versus proactive — one can argue it benefits the consumer.
To add some perspective — the NFL will do $15 billion in revenue, and the MLB will do $10 billion in revenue. The PGA of America consistently does around $100 million per year. It is a safe assumption that the PGA of America has a bigger vision, and we will learn more about its aggressive growth plans in the future.
The PGA of America publically announcing EP Golf Ventures has my attention — they genuinely believe in growing the game to benefit its 28,000 members.
It is essentially a flywheel.
Invest in Company XYZ
Company XYZ increases the participation in the game
Participation in the game increases member revenue
Good for the PGA of America — investing in golf organizations will continue to drive value for consumers and benefit the game of golf.
Have yourself a great Monday. Talk to you next week!
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