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Tuesday, Dec 6, 2022

UFC Execs and Investors See Another Winner With $300M Action Sports Event & Media Co.

Joe Carr thinks he can build Costa Mesa’s Thrill One Sports & Entertainment into the Ultimate Fighting Championship of the action sports industry.

Others—including deep-pocketed investors who helped build the UFC into a top-tier global sports brand—have bought into the hype for 2-year-old Thrill One, an events and content business looking to build an all-encompassing platform for motocross, motorsports, skateboarding and other amped-up action sports.

In July, the company got new owners, in a deal that valued Thrill One at about $300 million, according to reports.

Along with a pair of institutional investors, including one with ties to UFC’s former owners, well-known sports and media personalities that put their money into the company were UFC President Dana White and skateboarder-turned-entrepreneur Rob Dyrdek.

The investors “knew there was power in numbers and offered the opportunity to scale the company within the industry,” Carr told the Business Journal.

Event-Based Thrills

Thrill One focuses on creating “thrill-based” content through live sporting events at arenas and other venues, and broadcasting the events to a global stage. From demos, tours, and marketing and sales efforts, “the catalyst of it all is the event calendar,” Carr said.

The company’s brands include a trio of action sports leagues:

Nitro Circus, which includes BMX and other extreme sports competitions under one tent;

Nitro Rallycross or Nitro RX, a motorsports-focused competition “with huge jumps and steep banked turns,” and;

Street League Skateboarding or SLS, “the world’s premier street skateboarding series,” which was founded by Dyrdek.

“I’ve been a big fan of the Nitro guys for a while now,” said White, at the time the new ownership was unveiled.

“They are always doing the most insane stuff and constantly raising the bar. The potential reminds me of the early days of UFC.”

Thrill One controls the brands under its umbrella from top to bottom and keeps all its operations in-house.

It says it has over 70 live events planned for 2022, which will result in about 100 hours of sports content, in addition to producing more than 300 TV episodes.

The firm has a media unit, Thrill One Media, which is involved with television programs such as “Ridiculousness.” The show has been a staple on MTV since its debut with 55 billion minutes viewed since 2011 and is hosted by Dyrdek.

Television producer Craig Piligian was also an investor in the July transaction.

More projects, both scripted and competition formats, are currently in development and scheduled for later this year, according to Carr.

Thrill One has its production company in Los Angeles, and a core group of 45 employees based in Costa Mesa on 17th Street. It moved headquarters in July 2021, leaving San Clemente and settling closer to the “hotbed of action sports,” Carr said, noting other local firms like Volcom and Vans.

Fertitta Ties

In 2019, Carr was approached by UFC advisers and bankers, who asked him to lead the new platform; it launched a year later.

He had previously spent about five years with UFC in various leadership roles before joining the World Surf League as head of its international operations, and later served as its president.

Carr, a Harvard grad, also previously worked with the Fertitta family in their Las Vegas casino business, Red Rocks Resort.

Frank and Lorenzo Fertitta became multi-billionaires in 2016 after selling most of their stakes in mixed martial arts promoter UFC at a $4 billion valuation. The family has ties to Orange County with several homes in the area.

Las Vegas-based Fiume Capital, which public records indicate is a Fertitta-backed entity, was one of two lead investors in the July purchase of Thrill One, along with Juggernaut Capital Partners.

Washington, D.C.-based private equity firm Juggernaut has invested in other local brands in the past, including Irvine marketing firm Advantage Solutions Inc. (Nasdaq: ADV) and vintage jersey company Mitchell & Ness.

Fiume and Juggernaut bought out the stakes of Raine Group and Causeway Media Partners in the July transaction.

Youth Moves

Fiume and Juggernaut officials note that Thrill One has loyal followers in the highly coveted youth sports vertical.

In the past two years, the company has collected a following of 40 million people on its social channels, it notes.

“The growth is extraordinary, and you have to pay attention to that,” Juggernaut Chief Executive John Shulman said when highlighting the company’s stability through the pandemic. “We’re rallying around on how to keep growing rapidly and in a more pronounced way.”

Fiume’s Chief Investment Officer, David Hirschfeld, praised the company for the universal understanding of its brands, and the participatory fan base it has. Carr also emphasized the latter, saying that “the base of action sports is high participation.”

The executive noted that youth participation in the sports it oversees had accelerated during the pandemic, with no team sports available.

What started as a lifestyle has become a professional trend and is now experiencing international growth, he said.

“I’m feeling really good about the trend line on the participation level,” Carr said when asked about the brand’s audience. Thrill One plans to invest more at the youth level as a long-term strategy.

International Expansion

Hirschfeld, who has been part of several Fertitta family-run businesses over the years, said a focus of the new ownership is “adding events, adding features and growing geographically.”

Nitro Circus Live is adding New Zealand and Canada to its world tour and plans an upcoming championship in Australia this October. Nitro RX made its motorsport debut last year and will run across three continents for the upcoming tour.

Owning the Category

With the new ownership, Carr said he will take a more aggressive approach to his growth strategy for Thrill One.

The company will look to add even more sports to its existing brands to create a multi-discipline portfolio, such as motor sports and racing. This also allows for cross promoting between brands and reaching new audiences.

Carr reported having a few active conversations related to those efforts.

Other plans include new platforms to launch content on. Action sports brands have been built on social media having always been “digitally native,” Carr says.

Now the company also needs to build on traditional, linear media to keep its following.
“No one sits atop of the entire industry. We want to be the one, to own the category.”

OC Neighbors Turned Brand Partners

Newport Beach-based A Shoc Energy partnered with Thrill One Sports & Entertainment in January to become the official energy drink of the action sports entertainment company and its brands.

The two organizations are stationed two streets away from each other along the Costa Mesa-Newport Beach city lines, with A Shoc on Placentia Avenue and Thrill One on 17th Street.

Following a mutual connection between employees, Thrill One CEO Joe Carr realized the brands existed in the same space which resulted in an eight-figure, multi-year agreement.

It was described as one of the largest sponsorship deals in action sports history—not a small feat given the sizeable amounts of advertising spent in the action sports industry from the likes of Corona’s Monster Beverage Corp. (Nasdaq: MNST) and Austria’s Red Bull.

$29M Funding

A Shoc raised $29 million in a Series B funding round in April led by existing investors and prominent athletes including skateboarder and Street League Skateboarding champion Paul “P-Rod” Rodriguez.

Its products are available in about 80,000 retail locations across the U.S., including 7-Eleven and Target.

A Shoc markets its beverages as free of sugar and preservatives to be a more modern version of Monster and Red Bull. “We’re so focused on the athletes,” Chief Executive Paul Nadel told the Business Journal after the $29 million fundraising. “They can drink it without guilt.”

A Shoc, also known as Adrenaline Shoc, was co-founded in 2019 by Scot De Lorme, who was vice president of innovation at Monster Beverage.

The other co-founder of A Shoc is Lance Collins, who has founded several beverage brands, including BodyArmor, which was bought out a year ago by Coca-Cola Co. for $5.6 billion.

Carr says he would have never found the beverage brand if both companies had not been based in Orange County. “We’re excited to be here knowing the industry is here.”
—Emily Santiago-Molina

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