Achieving Success In Sports Investing With De Anna Guerreiro Of Athlon Family Office

Sports is becoming one of the best places to invest in right now. Find out how to secure huge wins through sports investing with De Anna Guerreiro of Athlon Family Office. She joins Scott Kelly to share her mission to provide the right financial literacy to professional athletes and how to invest in high-growth sports-related companies. De Anna also discusses why sports investment must always be approached with utmost caution and stresses why joining bandwagon assets is not always a good idea.

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Achieving Success In Sports Investing With De Anna Guerreiro Of Athlon Family Office

I was really excited to interview a new friend of mine, De Anna Guerreiro. Over the last couple of months, I’ve learned some fascinating things about what she’s doing in sports investing, which is becoming a top place to invest for private equity in all phases of sports. She started out as an entrepreneur.

She started out in the ‘90s in banking and the mortgage industry. Working in that space, she worked on developing luxury homes, condos, subdivisions, and shopping centers. She had an opportunity to move on to raise money in the oil and gas industry and created all these partnerships. She’s uniquely qualified to help these sports-related companies succeed.

When you listen to her, you’re going to hear about what she’s doing with some top professional sports teams that are really getting tremendous valuations, and she’s finding great opportunities to invest at an earlier stage, providing her vast experience, the experience of her team at Athlon Family Office, to help these portfolio companies grow. Sports are fascinating, and De Anna is right at the heart of it. Give a listen to learn more about what she’s doing in the sports industry.

I’ve been looking forward to this interview for a while, De Anna Guerreiro from Athlon Family Office. Welcome to the show.

Thank you, Scott. It’s my pleasure, and what an honor for us to be on here with you. I love what you’re doing for sports asset classes.

De Anna Guerreiro of Athlon Family Office

I’ve always been a sports fan, and sports are becoming great. We’re going to jump into that a little more in just a couple of minutes, but maybe share a little bit of background before you start the family office, and then we’ll jump into what you’re doing there.

I come from a long line of entrepreneurs, and my dad was a contractor. My grandpa was a contractor. I basically grew up in a commercial building. That’s my playground as a kid. I did acquisition and development for over twenty years. Right out of high school, I worked for Citibank. I worked for the attorneys who were partners with the governor, Dick Lamm, in Denver. We did corporate banking, criminal, and domestic. They represented a lot of banks. We had, like John Elway, Janet Elway, and other Bronco players and celebrities, as our clients.

Over the years, I had worked with different athletes and then transitioned into acquisition development. My first fund, we bought ten oil wells down in Texas. We had mining operations in Latin America. We had a chicken slaughterhouse for a short period of time in Brazil. That was crazy. I was constantly mentoring athletes, and I had an NBA player for the Chicago Bulls who was retired and wanted me to mentor him. It was really through mentoring him that Athlon was created because I saw this huge need to teach athletes about the power of the purse.

No one was really teaching them about financial literacy in a way that they dominated and controlled their own destinies. I really wanted to create a platform where it is for athletes by athletes, and that would give them direct opportunities to invest in direct investments into different companies. It organically grew into a sports theme that I wasn’t anticipating. I was introduced to Milan Mandaric, who used to own Sheffield Wednesday. He had a soccer team in Europe that he was trying to sell. He’s like, “De Anna, you should buy my team.”

I’m like, “Dude, I don’t know anything about running a soccer team.” He goes, “Yes, you do. You keep telling me everything I’m doing wrong.” I’m like, “You’re a billionaire. You’ve got 600 employees. Do you know better?” He’s like, “I’m old and I don’t care anymore.” He says, “Think about it. If you bought my team and installed your financial literacy piece, which I think is quite brilliant, you could really change the landscape for athletes because you actually care about them.” That grabbed my heart in such a way that I said, “Milan, let me think about this. Give me a couple of data points and we’ll call you back.”

I called him back and I said, “I’m going to do this, but I’m going to come out there and you’re going to teach me everything you know about owning a soccer team because I’ve got to know everything. I’ve got to know the risks. I’ve got to know everything that goes with it.” That’s how we got into sports ownership and then all things sports. Next thing I know, I’m getting decks on my desk that are everything that has to do with sports teams, and like sports tech, biotechnologies, and life sciences. All this stuff started coming in. It was just organic how it was happening. That’s how Athlon got on the books, on the page.

Teaching Financial Literacy To Professional Athletes

I want to unpack two things. You mentioned financial literacy as it applies to athletes. I really want to take a couple of minutes on that because you, I, and the audience probably know dozens of stories of athletes who have made hundreds of millions of dollars and lost everything. It seems like every week there’s a story about some professional athlete who had an advisor or a friend or just blew it, being a professional athlete. Talk to me, how were you applying that to making these athletes better investors? Let’s start with that.

You’ve got to sit down with them and you’ve got to talk to them about budgets. If their contract is for $5 million for 2 years, or 1 year, or 3 years, then they know they have taxes. A lot of these athletes don’t understand that they need to set up an LLC. I had a hockey player who played for the Tampa Bay Bucs. He’s a smart guy, and he has a really great wealth advisor whom I like very much.

He’s a good guy, but no one sat down with him and said, “You need to create a corporate LLC.” He had three different multifamily projects, but they all had their own LLC. I’m like, “Dude, what’s your main one?” He goes, “I don’t have one.” I go, “You have to have one.” He’s like, “I’m W-2.” I said, “It doesn’t matter.” He couldn’t get over the fact that he was W-2.

I said, “We need to create your LLC, and you need to run all your salary through your LLC. You need to put your other three corporations underneath that LLC.” I go, “The tennies that you’re wearing, the supplements that you took this morning, the gas that you put in your car, all of that stuff is tax deductible. Every single bit of it, you run it through the business, pay it.” I go, “I just took it from 35% taxes down to 22%, you’re welcome.”

Athlon Family Office’s Focus On Sports Investing

You would hope that professional athletes would have access to smart education like that. I’m really excited about what you’re doing for athletes, because I know several who are friends of mine and so do you, who have lost their fortunes. Kudos to you for that. Let’s talk about the investment environment. Probably outside of AI, sports investing is probably the thing that’s getting talked about the most from every sports league, all the way from pickleball to badminton and every major sport in between. Maybe talk a little about your funds thesis and where you’re playing in that ecosystem.

Our portfolio, the Athlon portfolio, has an 80% IRR to investors.

Congratulations.

Thank you. That’s several companies in our portfolio. Our sweet spot is that we like to look at companies that are $2 to $15 million in capital. If they need that capital over the next 24 to 36 months, we can figure it out, and we can fund it in tranches. Even if we’re doing an amount of like $2 to $5 million now and do another $10 million, because we’re looking at the traction over the next three years. We lock up that equity position.

That way it minimizes any dilution. As you know, every time companies go to another company and they’re raising capital, those original investors are diluted more and more. I don’t think that’s a good model. One of the things is that investors, when they’re in the early stages, they’re taking a huge gamble on a company to build out their product or the platform.

Big private equity groups come in, they buy them out, and their dilutions get taken away. I want to try and preserve that. When we’re putting in capital, we want to be able to become a strategic partner with them to help grow over the next 2 or 3 years. We just signed Fathead up. We’re their GP, $15 million capital raise. A million a month in revenue. Fathead is awesome. Chris Hetherington is brilliant.

He’s a former NFL player, and he took this company and restructured it and created a whole better platform than it was before. He’s really jacked it out. Talking about sports as an asset class, that’s the companies you want in your asset class. Jaxson Maximus, which is the ultimate man’s cape, is down on Brickell Road. You know those guys, they’re amazing.

A father and daughter duo. They created this luxury brand for men’s clothing and custom clothing wear. Now they also have a golf brand. They’re amazing. We’ve got Fanatic TV. Fanatic TV is basically Twitch and TikTok on steroids, live-streaming TV for Gen X. This is a great tool for NIL kids who really want to get themselves known out in the industry because they can self-stream TV live. Order is basically Uber Eats.

Order is Uber Eats for stadiums that’s collecting all the data of all customers on what they’re buying, how they’re spending when they’re at the games. They can buy their seats there. We’re saving pro sports teams like hockey and baseball, the NBA, and the NFL. We’re saving them at least $750,000 a year in merchant fees that they’re currently paying to other companies just by using the Orders app.

Exercising Caution In Sports Investing

You took the thunder out of my next question in terms of success stories, but congratulations on that. Where are you seeing the future trends? You’re obviously in sports directly, sports adjacent, sports technology. Where do you see the trends going forward? What’s the next big thing that you see in sports?

I think you have to be very cautious because sports are an asset class. As you know, I’ve been saying that for years, and everybody’s jumping on the bandwagon and they’re throwing money into companies, but they may not be a good buy. You have to be really careful because there are a lot of areas that are trying to grow. You’ve got the paddle or the paddle ball.

You’ve got cricket, and you’ve got some of these other types of racquetball stuff. You’ve got to be careful because they’re trying to bring so much momentum, but do they really have a good customer base yet to really start throwing capital into it? One of the ways that some of these strategies should work is in rugby, for example, if there were rugby leagues with every college, they had a team for rugby for every college, that would increase the consumer play.

You would be able to have foster talent from the college levels. If you had some of these teams, some of these leagues in the college brands, in order to foster talent, then you could create a big ecosystem. A lot of them don’t have that. Are you going to get your customers and your pro fans, your pro players? You’ve to be careful. The USL, obviously, as a former owner, I love the USL. I’m a big fan of the USL.

They just went into promotional relegation. I think putting money into the USL, if it is the right group, because not all groups are the same, and not all cities are the same. You need to be careful there as well. Their ecosystem around the stadium and entertainment districts, I think that’s one of my sweet spots. I know that space very well. Our advisors are Alti Global. Stephen O’Kane, who has been our advisor for a couple of years, has been very instrumental with us on those types of projects that we can look at domestically and internationally on pro soccer teams that have some development around the stadium that’s going to create an ecosystem.

You’ve got to have a place for people to commute. Community is super important when you’re talking about pro sports teams. You’ve got to have other integrated businesses that are merchant, AI, and technologies that are going to help build out the revenue brands because investors need to make their money back. You’ve got to be careful if you’re going in and buying $8 billion for a pro NFL team. How long is it going to take for investors to earn the money back? Just saying.

Investor Profiles At Athlon Family Office

It’s interesting you say that because I tell people all the time that when entrepreneurs are approaching investors, putting the money in is the easy part, getting money out is the more difficult part of the equation. Let’s shift to the investors who invest along with you both now and in the future. Outside of professional athletes, what’s the makeup of the people who invest with you in your office?

Family offices, ultra-high-net-worth individuals, and other private equity and venture capital groups that want to come in and be an LP or a co-GP. We are very friendly to co-GP positions. I cannot mention names because I need to keep things confidential. We have a lot of those types of investors. You have a relationship with Josh Harris’s guys. One of their guys sits on our board at 26 North.

Great people, Alti Global. We have other amazing relationships with RIAs that specialize in athletes who want to invest. Honestly, I think if you are an avid sports fan and you’re a CEO and you have some capital and you want to put money into a direct investment, we’re who you want to call because you’re going to be able to go into either a direct ISPV or we have an allocation into the Arctos and CAZ Investments, and buying into the NFL and Balls and Sticks Fund. Arctos is quite brilliant, I will say. CAZ is their anchor investor. They’re great guys.

Everybody there is top-notch. They’re amazing when it comes to sports investments. They’ve been doing it for a long time, so they have a lot of success. If you are one of those investors who says, “I’d like to have an equity piece in the bills or the chargers or one of the other teams that they own,” we’re who you want to call because you can get in seal and through our portfolio. You’re getting an eight percent preff. In two years, you could be able to do secondaries where you can turn around and sell your shares for the current value of the team, even though it’s bought at a discount.

Upcoming Sports Summit In October

Again, you took my other question in advance, and I appreciate that. You’re a great interviewer. I don’t know how to do the work. I really appreciate it. Tell me what else you want to share? Any final thoughts you want to share with the audience?

I really love to work with entrepreneurs. I think that you know we’re doing a very big sports summit in October down in Boca with 1640 Society. 1640 Society is an exclusive family office group that I’ve been a member of for many years. I love them. I’ve met some of the most amazing families. Some of the wealthiest families in America are members there, and it’s just an amazing group of people looking for collaboration in the family office space.

We’re doing a sports summit with them in October down in Boca. We have some opportunities for sports companies that are looking to pitch. They want to get in front of some of the athletes, the private equity capital guys, and family offices. We still have some spots available for that if people want to be a sponsor. If they want to reach out for that, that would be amazing. Entrepreneurs, I come from a long line, thirteen generations of entrepreneurs in my family. I think like an entrepreneur, I structure things like an entrepreneur, and entrepreneurs that are looking for good investments that are going to give them good returns, we’re that place.

They can come and partner up with us and be involved in these companies. As you know, the sports asset class is not a fad. It’s really not for the faint of heart, but there’s something really special about working in this environment and being involved with some of the most amazing sports owners. I know a lot of owners of a lot of teams, and they’re some of the most amazing people I’ve ever met in my life. I love being around them. I think if you are an entrepreneur and you have some capital, this is where you want to put your money because you are going to make money in return.

Get In Touch With De Anna

Fantastic. Where can people learn more about your family office and get in contact with you to become a potential LLP?

They can reach out to you for one thing, Scott, but they can also reach out to me. I’m on LinkedIn, and they can email me at DeAnna@Athlonfo.com. They’re welcome to email me or reach out to me on LinkedIn. I’m terrible about getting back on LinkedIn because I get so many messages, but emailing me at DeAnna@Athlonfo.com is probably the best way to reach me.

For everyone tuning in, there’s a great opportunity in sports, and if you want to be in the middle of it and in the front of it, obviously, De Anna is a great resource for that. For everyone tuning in, make sure you like, comment, and share. Again, De Anna, thanks for being on the show.

It’s my pleasure, Scott. Thank you so much.

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Do you know what I loved about this interview with De Anna from Athlon Family Office? That she started out serving the companies and the entrepreneurs she invested in. She started out with Athlon as an opportunity to provide financial literacy, budgeting, and how to set up a tax structure, and to help you set up your corporate structure for these athletes. These athletes are making millions upon millions of dollars.

These are twenty-year-olds who are getting this money. I thought it was fascinating and really encouraging that she’s helping them become better with the money because there are all kinds of stories of athletes losing their fortunes. She has a great investment strategy. She’s invested in these sports companies that are $2 million to $15 million in capital need.

They’re really providing not just the capital, but the expertise to help these sports companies grow. She’s getting great returns, an 80% internal rate of return, which is amazing. Some of the key takeaways I got were that these high returns in sports really take founders who should prioritize comprehensive financial education for their athletes seeking strategic capital that mitigates the dilution and really creates the outcome and the returns I just mentioned.

Not only does she provide capital, she provides the value of strategic partnerships and opportunities for folks and investors to invest in these opportunities, like NFL teams at a discount. Her expertise and her contacts are providing a real opportunity for entrepreneurs in the sports space to succeed sports teams of all sizes, professional and others, to raise capital and get strategic relationships. For the investors, they’re getting a phenomenal return, which I expect is probably going to get to you with the growth of sports. Make sure you listen, like, comment, and follow this great interview with De Anna from Athlon Family Office. Thanks again for tuning in.

Important Links

• De Anna Guerreiro on LinkedIn
• DeAnna@Athlonfo.com
• Athlon Family Office
• Alti Global
• Arctos
• CAZ Investments
• 1640 Society