Vinny Smith has added a professional soccer club to the growing list of investments he’s compiled since netting some $800 million on a $2.8 billion sale of Quest Software three years ago.
He led the Aliso Viejo-based business software maker before the sale to Dell Inc. and now heads Orange County’s largest venture capital firm.
His recent purchase of NK Istra 1961, a club in the top division of the Croatian First Football League, appears to have been personal rather than part of Toba Capital, the Irvine-based VC firm Smith launched with former Quest colleagues in late 2012 to fund the “next generation of IT infrastructure.”
Smith’s camp won’t disclose the financial details, but a safe estimate on the price for NK is in the $10 million to $15 million range, considering the league isn’t among the sport’s European stalwarts—a bunch generally found in Spain, England, Germany and Italy.
The acquisition appears to be a labor of love for Smith, an action-sports fan who got to the University of Delaware on a wrestling scholarship.
“I don’t think it’s a Toba opportunity—it’s more for Vinny,” according to a source close to the deal. “It’s exciting for him. We want to come in and take a long-term view.”
The initial game plan includes building an infrastructure to support a youth team and upgrading the club’s 10,000-seat Stadion Aldo Drosina to hold ancillary events such as concerts.
Location
The push for entertainment and other uses could get a boost from its location in the city of Pula on the coast of the Adriatic Sea. The area is known as a jewel on the southern tip of the Istria peninsula, home to some of the world’s oldest surviving Roman architecture.
European soccer leagues, unlike Major League Soccer in the U.S., don’t have drafts, so improving youth clubs as a pipeline of talent is essential to building long-term success, particularly for franchises that lack the financial muscle and resources to acquire top players.
“We want to invest in these types of programs so we can help the local community,” the source said. “We want to build a platform for the team and players.”
Istra 1961 finished in ninth place in the 10-team First Division in the recently ended season, narrowly avoiding a demotion to the Druga HNL, the Croatian Second Football League.
Despite the country’s relatively small population of 4.2 million, Croatia’s soccer league is ranked 17th of 55 European countries, according to the sport’s governing body, the Union of European Football Associations.
The league has been dominated by Dinamo Zagreb, the champion of the top division in each of the past 10 years. Besides the lack of parity, Dinamo Zagreb’s dominance is one obvious challenge to other clubs in the league, and there are several others for Croatian soccer in general. The sport faces a spate of difficulties ranging from widespread reports of financial struggles among several of its top teams to match-fixing scandals and bribery allegations that have plagued the league, which formed in 1992 after the fall of Yugoslavia, which led to Croatian independence.
Istra 1961 had its best run in the 2002-03 season when it finished runner-up in the Croatian Cup.
The top four teams in the league qualify for the early stages of the Champions League and the Europa League, prestigious club competitions that can add millions of dollars to a club’s revenue stream.
It bears watching if Smith will bring his technology chops to the pitch.
Analytics
Soccer has been the last of the major sports to incorporate analytics, popularly known as saber metrics in baseball. Dutch club AZ Alkmaar earlier this year hired Oakland Athletics General Manager Billy Beane as an adviser. Beane is considered an analytics pioneer in professional sports, which has widely adopted his philosophy of data-driven statistics to make business decisions regarding player contracts and free agency.
Smith knows the analytics segment well and has invested in several big-data providers as Toba has expanded its portfolio to more than $300 million in investments and more than 35 companies.
Quest, the lynchpin in Dell’s ongoing efforts to diversify product offerings beyond computers, makes software that manages and improves on other business products from Redmond, Wash.-based Microsoft Corp., Oracle Corp. in Redwood Shores, New York-based IBM Corp., and others.
The company grew to more than $800 million in annual sales and into the upper ranks of OC’s software makers before its sale.
