Bruin offering continues to take shape with addition of Two Circles
By Simon Ward
Bruin Sports Capital, the international sports and entertainment investment company headed up by George Pyne, has added to its burgeoning portfolio with the acquisition of Two Circles, the UK-based data-driven sports agency, from advertising giant WPP.
Two Circles employs intensive data analysis, marketing and technology to enable sports bodies, event organisers and clubs to drive new business, notably in ticketing, sponsorship, stadium redevelopment and subscriptions.
Bruin's acquisition of an 80-per-cent stake in Two Circles values the company at $42 million, according to the Wall Street Journal., and it joins an assortment of properties at the New York-based firm, which recently secured $600 million in new investment from private equity firms CVC Capital Partners and The Jordan Company.
The deal, which is subject to European Commission approval, will see WPP retain a minority stake.
Two Circles, founded in 2011, was acquired by WPP subsidiary GroupM in 2015, and retained by the advertising multinational when it sold IEG, the US sponsorship valuation and measurement company, and the US brand consultancy of ESP Properties to Bruin last year.
However, Bruin continued to covet Two Circles, which claims to work with the top five sports properties by annual revenue and expanded its international operation with the opening of a new office in Los Angeles this year.
The acquisition represents a deepening of a relationship dating back to 2017 when Two Circles began marketing OverTier, the Bruin-owned venture that manages NFL Game Pass, the league’s premium streaming service, on an international basis.
In October, OverTier expanded its relationship with the league beyond Europe so that its footprint now covers 181 countries worldwide (excluding USA and Canada).
Other Two Circles clients include English soccer’s Premier League, Uefa, Formula 1 and the Wimbledon tennis championships and, among other major events, it has helped devise ticket strategies for this year’s ICC Cricket World Cup in England and Wales and the British Open in Northern Ireland, both of which attracted large attendances.
The business is also said to have brought about record sponsorship rights growth, and subscription and consumption growth for leading direct-to-consumer businesses in 2019.
Following the sale of IEG and the ESP assets to Engine Shop, the Bruin-owned sports and entertainment agency, in July 2018, Two Circles became the face of GroupM’s rights-holder facing sports marketing business.
However, it is now being largely sold off as WPP proceeds with a restructuring begun late last year by chief executive Mark Read as he took the helm following the controversial departure of the long-serving Sir Martin Sorrell.
As a result of the retained stake, Two Circles clients will continue to have access to WPP, its global network and brand clients.
Nonetheless, joining Bruin is expected to accelerate the growth of the data-centric agency, which already employs 180 people in four offices (London, New York, Los Angeles and Bern in Switzerland), with scope for further investment and acquisitions to help it realise its potential.
A precedent has been set with Deltatre, the international sports media services company, which has grown exponentially since Bruin acquired a 75-per-cent stake in the business in 2016.
There are also potential synergies given that Two Circles is active in rugby union, a sport with which CVC is now intrinsically linked after it acquired a 27-per-cent holding in England’s Premiership Rugby and looks to complete deals to buy into Europe’s Six Nations and Pro14 competitions.
Pyne, the founder and chief executive of Bruin, said: “As we look to the future of the sports economy, everything we do will trace back to how well we can leverage consumer data intelligence to spur growth. Two Circles has been way ahead of the industry on this and has developed a new breed of agency that serves every business unit of a sports organisation. We are excited to have them formally join Bruin and look forward to working even more closely with their great team.”
Gareth Balch, Two Circles chief executive and co-founder, added: “The sports industry is moving from a B2B model to a direct-to-consumer model where growth will be centered around a direct relationship between sports and fans. Over the last eight years, we believe we have built proven models that can take sports properties on this journey. With Bruin's backing, experience, and relationships in global sport, we have the perfect platform to enter the next phase of commercial growth – both for our clients and as an agency.”
Bruin was launched by Pyne, the former president of IMG Worldwide Sports and Entertainment, in 2015, and its other assets include On Location Experiences, the joint venture NFL hospitality business, and Soulsight, the brand strategy and design agency, with its portfolio of companies now employing 1,700 people across 37 offices worldwide.
Endeavor, the prominent entertainment, sport and content company which owns IMG, has been strongly linked with a deal to buy On Location Experiences, while it emerged last week that Bruin was weighing up options for Deltatre, which could include, but will not necessarily entail, the sale of the business.
The Two Circles deal shows Bruin has not lost the taste for acquisitions, and this is likely to remain the case following the entry of CVC and TJC, which have joined other partners including Rock Ventures, the holding company of Dan Gilbert, the owner of the NBA’s Cleveland Cavaliers, NNS chaired by Naseef Sawiris, the Egyptian billionaire who co-owns English soccer's Aston Villa, and others, meaning that combined investment now amounts to nearly $1 billion.