Hedge fund manager Tom Wagner used to joke with friends about buying a pickleball team. Then, the opportunity came along — and he called up his old buddy, Tom Brady.
Knighthead Capital Management, the firm co-founded by Wagner that manages about $9 billion of assets, led an ownership group that includes the NFL superstar and former world No. 1 tennis player Kim Clijsters that purchased a team for the 2023 Major League Pickleball season.
It’s an unusual move for a hedge fund known for specializing in event-driven distressed credit opportunities. Yet Wagner believes the team’s value could significantly increase as the sport becomes more popular.
“This is a fun investment because the sport itself is fun, but we’re approaching it very seriously as a business,” said Wagner, who declined to say how much the group paid. “This isn't a deployment of capital because we happen to like the sport — it’s because we see a significant opportunity.”
Pickleball, which combines elements of tennis, badminton and ping-pong into a sport that’s accessible to both young and old athletes, was created in the 1960s but has soared in popularity in recent years. Major League Pickleball is expanding as well with plans to boost the number of teams to 16 from 12 and double the number of events to six.
Wagner is betting that bringing in high-profile names like Brady, a five-time Super Bowl MVP quarterback, will boost the sport’s TV viewership.
“Tom has a pretty gigantic media reach, and I think his involvement should draw substantial interest to the league,” Wagner said. “As the league does better and draws more fans to its events, I think we'll see an increased value of the league, increased revenues and increased participation.”
In an Instagram video posted Wednesday, Brady said: “I've been trying to find a way to extend my professional sports career beyond my 40s, even into my 50s, 60s, 70s. As long as I can, right? And I think I got the answer. Seems like everyone else has the answer too. Pickleball.”
Other celebrities involved with pickleball teams include NBA stars LeBron James, Draymond Green and Kevin Love, along with Super Bowl champion Drew Brees. On the Wall Street side, Avenue Capital Group founder Marc Lasry bought a squad.
There are several pickleball leagues in addition to the MLP — including the Professional Pickleball Association and the Association of Pickleball Professionals — and Wagner sees the possibility for them to combine.
“It would be healthy for the sport to have a dominant league, and I think a dominant league will naturally emerge with increased success and increased following,” he said. “We voted with our investment here on which one we think will drive that outcome.”
The investment group led by Knighthead also includes Callie Simpkins, director in leveraged finance sales at RBC Capital Markets, Kaitlyn Kerr, a financial adviser at JPMorgan Chase & Co., and producer Matt Alvarez.
Wagner said that he and Brady often play pickleball together and “have a couple mutual friends that we try to beat up on,” but has yet to take on Clijsters.
“I’m not sure I would want to,” Wagner said. “That could be a very embarrassing experience. I think she would dominate me if we played.”
–With assistance from Katia Porzecanski.
This article was provided by Bloomberg News.
