Private equity companies took note of the rise of youth sports in the United States. It is an industry that currently generates approximately $40-60 billion (with a B) dollars per year.
Gone are the days of Little League and Pop Warner.
Even if those kinds of non-profit youth sports organizations still exist in most parts of the country, they are less prominent than ever. And they don’t produce the most elite level athletes like they used to.
Youth sports cost an increasing amount of money.
The landscape of youth sports has completely changed over the last decade, shifting from community-based recreational activity into a full-blown profit-focused industry. It used to be focused on accessibility and participation. It is now centered around elite competition and rooted in revenue.
The transformation is largely fueled by the growing involvement private equity and sponsorships.
Financial investors recognized that parents (who can afford it) are willing to spend a lot of money on their children’s development. And the demand for these kinds of opportunities is year-round, which creates a dependable and scalable source of income. As a result, private equity firms and wealthy corporate sponsors started to buy up youth sports leagues. They also started to invest in the things that help them operate, like training facilities and tournament organizers.
What used to be a fragmented system of local youth sports programs continues to consolidate at the hand of private equity. It has completely destroyed the previous model. Low-cost, community-run leagues are replaced by high-cost “pay-to-play” leagues that are focused on profit.
Families are now expected to spend thousands of dollars per year on tournament and team fees, in addition to the rising cost of equipment and things like travel, lodging, etc. Youth sports are no longer a widely accessible activity. Participation increasingly depends on financial resources.
Is it worth the price?
There is an ongoing debate about the role of private equity in youth sports. As the cost continues to rise, young athletes also face a growing pressure to specialize early. They will fall behind if they do not train year-round and approach their training as a pathway to higher-level competition. Athletes that compete in the most elite tournaments on the most elite programs are more likely to get exposure as they reach high school with the goal to one day play in college or as professionals.
Some people think that is a great thing for families who can afford it.
They do not attribute the high drop-out rate at the age of 13 to the privatization of youth sports.
Others see it as a serious issue. They are likely in the majority.
Parents who cannot afford the current price tag for elite youth sports, or choose not to pay the high prices for private equity-backed leagues, often see their children fall behind in their sport. Specialization and year-round training in a single sport can also reduce the enjoyment of that sport while simultaneously increasing the physical and emotional strain attached to that sport.
There are a few different theories on how to fix this problem. The ‘Long-Term Athlete Development’ model is one. Here is another:
At the end of the day, if you child is good enough to play his or her sport on the next level, the colleges and/or professional organizations will find him or her. You don’t have to pay to play. However, it has become increasingly difficult for a young athlete to excel at his or her sport without the elite level training and competition. That requires the parents to shell out some serious dough to private equity firms.