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Good Thursday Morning. Here’s the rundown of this week’s Sports Business Playbook:

• 📰 This Week’s Topic: The Charlotte Hornets’ next jersey patch sponsor is…content creator Mr. Beast? We look at the vantage points of this first-of-its-kind deal from all sides and what it could mean for the future of high value sports partnerships.

• 🍸️ Impress Your Friends at Cocktail Party: Want to show off your sports knowledge in a public setting but don’t have time to read the deep dive? Hit the “Impress Your Friends at Cocktail Party” section at the bottom for a CliffsNotes of this week’s topic

• 🤯 “Whoa of the Week”: NWSL valuations are looking mighty nice!

• 💪 Weekly Reminders that Sports are Awesome: Waino’s family can get a puppy finally

Hey team,

Big news out of Charlotte, North Carolina earlier this week, as the Hornets announced a first-of-its-kind jersey patch partnership with Feastables, a snack company owned by North Carolina native and the world’s biggest YouTube star, Jimmy “MrBeast” Donaldson.

Starting this season, the Feastables logo will appear on jerseys for the Hornets, their G League affiliate — Greensboro Swarm, and their NBA 2K League esports club — the Hornets Venom GT (both virtual and physical jerseys). The Feastables logo will also appear on the media backdrops for all Hornets press conferences and interviews, and the Hornets and Feastables "will collaborate on digital media, content and marketing opportunities."

The tie-up is so unique because of the entity (person) involved as the sponsor and the visibility of the sponsorship. These jersey patch deals are typically reserved for large corporate organizations because of the deal size (usually seven to eight figures annually) and are one of the most high value sponsorship assets the clubs have outside of arena naming rights. For reference, the Hornets’ prior deal with online loan marketplace LendingTree was worth $5 million annually, and larger market clubs (i.e., the Lakers, Knicks, and Nets) fetch between $25-$30m per year and work with large finance or CPG firms.

So, one of the most popular people on the planet — MrBeast has over 300 million followers across social media — has now bought a high visibility asset with a small market club that does not have a great track record of success on the court.

What’s in it for him, and what’s in it for the Hornets by breaking the mold and going with a different — and potentially more risky — partner on one of their crown jewel assets?

Let’s dive in.

Mr. Who?

For every non-GenZ reader, let’s do the obligatory “who is MrBeast?” section.

Jimmy “MrBeast” Donaldson is the one of the most-viewed (180 million+ subscribers) and highest paid (reportedly earned over $50 million last year) YouTube creators in the world.

He became popular in 2017 by doing incredibly intensive stunts and challenges (i.e., reading every word in the dictionary), and his videos have only grown in the complexity and ambition since then. He’s also started to take on more of a philanthropic slant recently, paying for 1,000 blind people’s eye surgeries to enable them to see and doing cash giveaways for people on Twitch and YouTube. He also is the guy with Tom Brady and the drone.

As his popularity has grown, MrBeast has become part of the growing trend of influencers who have used their platform to launch ancillary lines of business, including merchandise and consumer products.

Feastables is one of those offshoots, and the upstart chocolate snack company reportedly generated over $10 million in revenue just a few months after launching last year through only YouTube and social media promotion.

Now, MrBeast has his eyes set on challenging the established players in the snack space, and he believes this partnership with the Hornets can help him do that.

Vantage Points

Charlotte Hornets Leadership

You are new Hornets owners Gabe Plotkin and Rick Schnall. You took over earlier this year and are gearing up for your first season.

As with all new owners, you want to “win the press conference” by saying all the right things and making a big splash early. This deal checks that box.

Is it risky? Of course. Content creators’ businesses are inherently tied to their ability to drive views and virality, which can lead to some questionable decisions and controversy. Plus, because it’s really one person and his team, the stability is inherently going to be lower when compared to a corporate entity.

But, you’re starting at a low point after buying the team from Michael Jordan for a premium at $3 billion earlier this year. While he may have been the GOAT on the court, Jordan’s 13-year tenure as owner of the Hornets was mediocre at best, as the club went 423-600, only made the playoffs three times, and never won a playoff series.

This consistent lack of success, combined with playing in the 21st largest media market in the US, means that you’ve got a lot of work to do to expand the fanbase and bring the Hornets into the national conversation.

MrBeast’s built-in audience of 300 million+ people around the world should help with that.

Having Hornets branding on Feastables packaging and/or including Hornets content in MrBeast videos is going to hopefully raise the Hornets’ brand awareness and tap into the coveted GenZ/Millennial audiences that all sports organizations are seeking to cultivate.

This is a bold move, but it’s a necessary move. It showcases that you as new owners are willing to think outside the box to grow your addressable audience and get people talking about your club.

MrBeast

You’re MrBeast.

You’ve been crushing it on YouTube for the better part of a decade now, and you’re now starting to build your empire as a platform company.

Feastables has done incredibly well, and you’re projecting to be in over 50,000 stores soon. Now, you want to take the next step towards further legitimacy by gaining the mainstream consumer’s attention.

Following a similar plan to fellow content creators Logan Paul and KSI’s PRIME sports drink, you think sports provides that gateway to the mainstream audience.

Are the Hornets the splashiest team you could have partnered with? No, and one could argue that they need you more than you need them.

But, they are your home state club, which counts for something, and the get-in price on this deal was most likely significantly lower than if you had exactly followed PRIME’s playbook and targeted massive global brands like the UFC, Arsenal, and Barcelona.

The partnership gives you the legitimacy you crave but with more leeway to try to push the envelope and innovate than if you were to partner with a larger, more well known club.

Plus, you most likely didn’t negotiate a long deal, so if it doesn’t work the way you want, you can not renew in a few years and move on.

NBA Commissioner Adam Silver

You are NBA Commissioner Adam Silver. You (and the commissioners in all other leagues, for that matter) are watching this deal with equal levels of excitement and anxiety.

You don’t like instability. You just went through the crypto crash where a number of teams and leagues who had partnered with large crypto entities got burned in high value deals. While there is no “bubble” for this industry per se, these content creators have built their brands by often being provocative and evoking responses from their audiences, so your clubs are now opening themselves (and, therefore, your league) up to reputational risk and PR headaches should they do something stupid.

But, jersey patch deals are one of the most high value, high visibility branding opportunities that teams have. There is a ton of upside here and the partnership ties in well into all leagues’ initiatives to get younger and attract new fans. Testing this partnership style out in a smaller market like Charlotte enables iteration and improvement for potential expansion to more marquee franchises.

On this point, if it successful, there are more deals to be had. Night Media, the agency that represents MrBeast and several other top influencers, has signaled its interest in potentially doing more.

Ultimately, you want to ensure you are not caught on the outside looking in at a potentially game changing new category whose fanbase is considered the holy grail of marketing and audience capture. The MrBeast deal is a great test case for this bet.

Impress Your Friends at a Cocktail Party

Want to show off your sports knowledge in a public setting but don’t have time to read the deep dive? This section is the CliffsNotes of this week’s topic

• Opener: The NBA’s Charlotte Hornets announced a first-of-its-kind jersey patch partnership with Feastables, a snack company owned by the world’s biggest YouTube star and North Carolina native, Jimmy “MrBeast” Donaldson. Typically reserved for more established corporate entities, this deal is a professional sports team’s largest partnership with a content creator to date.

• Shot: MrBeast has over 180 million YouTube subscribers and 300 million followers across all of social media, and he’s now expanded into merchandise and consumer products, including his snack company, Feastables. The company did over $10 million in its first months after launching last year.

• Chaser: Vantage point of the Hornets new owners — we need to make a big splash and reinvigorate the fanbase after decades of mediocrity ironically under former owner Michael Jordan. This move is risky but it enters us into the national conversation and could enable us to grow our addressable fanbase, particularly with the coveted GenZ/Millennial audiences.

• Chaser: Vantage point of MrBeast — Feastables has done well, and now you want legitimacy and mainstream consumption. This move gives you both, and partnering with a small market club (and also from your home state of North Carolina) likely comes with a lower price point and more creative freedom than if you were to target one of the more marquee franchises.

• Chaser: Vantage point of league commissioners and executives — this is a deal that brings equal parts excitement and anxiety. Content creators can be volatile and create controversy, something you don’t love. But they also represent some of the leading voices of the next generations, and there is the potential that this could usher in a new era of partnerships that drive the business forward.

“Whoa” of the Week

Insane, mind-blowing things constantly happen in the sports business world. Here was my favorite of the past week.

1. NWSL Valuations are soaring, but they interestingly don’t appear to be as frothy as other leagues when it comes to revenue multiples

Weekly Reminder that Sports are Awesome

This newsletter is, of course, mostly centered on the business side of sports and the things that happen off the field. That being said, it’s important to remember why we fell in love with sports in the first place, though.

This section is meant to highlight the amazing things that happened in sports this week that serve as that reminder.

1. Dawww…best player retirement gift ever.

Thanks for reading! Let me know what feedback you have.

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Until next time, sports fans!

-Alex