This story strikes me as encapsulating the state of our society - and our culture - in the 21st century.
It seems to have almost everything - a current version of Gordon Gekko, kids in sports, rapacious private equity and, most importantly, just grim acceptance of circumstances that the majority of people don’t want but in which our financial overlords see one thing: money. More and more money.
Ahhhh. another lesson in late-stage capitalism before the collapse.
Let’s skate right on in:
What do we historically think about when we think of youth sports? A heathy outlet for kids energy. Teaching kids about winning and losing? Watching a soccer or hockey or basketball game with other parents we barely know but bonding anyway because… little kids?
Of course, there were - and always will be - those parents who think their kids will get a college scholarship or even make it to the pros. Reality tells another story. Only about 2% of high school athletes will receive college scholarships. When you consider that roughly half of youth sports players continue playing sports in high school, that means approximately 1% of youth sports participants will receive college scholarships.
Nonetheless, as a former youth sports participant myself who did go on to play at the Division 1 level (but did NOT receive a scholarship), and the father of two boys who participated in youth sports, I do believe the benefits (building confidence, learning teamwork, understanding the effort it takes to achieve, getting used to negative outcomes, and just downright having fun) outweigh the drawbacks (time sink, cost, travel, unhappy kids when things don’t go their way and more…).
But then again, my kids and I never had to deal with private equity in order to try out for a team or find field/rink time.
Let’s meet Murry Gunty:
Gunty demonstrated a pattern of unethical business practices over a private-equity career spanning three decades, USA TODAY’s investigation found. His and his companies' alleged conflicts of interest, self-dealing and refusal to cooperate with a government recall of dangerous cribs prompted two federal agencies to rebuke him and his companies. The findings call into question the extent to which Black Bear's leaders have prioritized profits over kids' and families' interests…
Pattern of unethical practices
Long before he started Black Bear, Gunty developed a reputation in the finance world for using unethical practices to get ahead.
As a graduate student at Harvard Business School in 1992, his classmates caught him tampering with votes to help elect himself president of a prestigious student organization, the Finance Club.
"Guntygate," as the campus newspaper that broke the ethics scandal called it, prompted national headlines and calls for his expulsion. Instead, Gunty wrote in a public apology letter that he had convinced administrators to, among other things, let him author an ethics case study to be used in the school's curriculum.
Now let’s find out what Murry Gunty is up to:
Gunty, founder of Blackstreet Capital Holdings, used his private investment firm’s youth sports arm, Black Bear Sports Group, to rapidly buy up ice rinks and teams across the Northeast and Midwest and then leveraged that control to steer families into its own costly ecosystem of leagues, tournaments and fees.
The result: higher prices, fewer choices and growing concern from legal experts that one company is consolidating power over a sport long rooted in local nonprofits, turning youth hockey into a pay-to-play pipeline where families must spend hundreds more each year or risk being shut out.
How does Murry Gunty view youth sports. All you need to do is read this excerpt from the article (bolding emphasis mine):
During a meeting with parents, Black Bear rink manager Scott Branovan assured families that little at the rink would change, George recalled.
“He straight-up lied to their faces,” she told USA TODAY.
The first year went relatively normally. Then in 2022, Black Bear approached the association’s parent-run board with a proposal to buy its teams for $1.
Branovan pitched the idea as a boon for players, who would benefit from Black Bear’s professional coaches and marketing support, multiple board members told USA TODAY.
Giving control of the region’s oldest youth hockey organization, founded in 1964, to a for-profit company was a nonstarter, said Amanda Rose, a board member. But as she and other parents learned, the proposal wasn’t so much an offer as a demand…
After the board refused to sell to Black Bear, Branovan in December 2022 told parents that the rink would no longer rent ice time to most of the association’s teams.
Its five elite Tier I teams – the top level of youth competition – could stay. But players on its lower-level teams, called the Pittsburgh Vipers, would have to either join Black Bear’s new in-house teams or find another rink.
“It was almost like a hostile takeover,” Rose said. “You don't just go in and take out an organization that has been a staple in the Pittsburgh area for so many years.”
There was nowhere to go. Throughout the 2023-24 season, parents on the association’s board scrambled to buy whatever ice slots they could find at the few other nearby rinks, including late on weeknights. It wasn’t sustainable.
In February 2024, the board voted to fold the Vipers after 60 years.
Gunty described the Vipers as a failing organization to whom he tried to lend a “helping hand.” He said they didn’t survive because they were a “very, very difficult organization” that “didn’t want to work with us.”
Documents George shared with USA TODAY, however, show that the association proposed a compromise to Black Bear, in which its teams would remain nonprofit in exchange for hiring some Black Bear employees to its staff. Black Bear rejected that counterproposal.
“We don't place any value on the Vipers,” Gunty told USA TODAY. “We don't think it's worth anything, and so we just went ahead and started our own.”
Those last sentences say it all: “We don't place any value on the Vipers. We don't think it's worth anything, and so we just went ahead and started our own.”
Gunty is not talking about youth sports value as many of us would normally define it. Again, developing skills, learning teamwork, making friendships, learning life lessons, having fun.
Nope.
To Gunty, value means one thing and one thing only: money. Gunty sees nothing positive or redeeming in a 60-years in the making youth sports team/culture other than the ability to turn it into a cash cow.
This is the private equity way. Find industries/organizations from which they can extract every last penny without creating anything of “value” (tangible or intangible) other than money. And leave human detritus in their wake (lost jobs, broken communities, even taking joy away from little kids).
In an effort to be fair, let me be clear. Many youth sports organizations struggle financially. So do many athletic facilities. This is how Black Bear rationalizes their rapaciousness:
Gunty defended his company in a 90-minute interview with USA TODAY, dismissing many criticisms as coming from a vocal minority of customers. He said Black Bear has saved struggling ice rinks, grown participation in the sport faster than the national average and made hockey more fun and accessible. To be sure, many of its rinks were in dire financial straits when Black Bear purchased them and might not have stayed open otherwise.
“I just hope everybody knows that I come from a really good place in trying to deliver a great experience for our families,” said Gunty, who frequently answered questions by pivoting to his company's accomplishments. His relaxed, friendly demeanor contrasted at times with that of his crisis communications consultant, Evan Nierman, who sat nearby.
“I believe that the vast majority of our customers love our coaches. They love what we’re doing in our buildings. They love the people they associate with,” Gunty said. “If they don’t like what we’re doing, they can leave.”
Sounds reasonable, right? Until you reread that quote from Gunty: “We don't place any value on the Vipers. We don't think it's worth anything, and so we just went ahead and started our own.”
No value on a kids’ youth hockey team. Financial value, that is. And nothing else matters.
In a post entitled “Private Equity is Destroying Youth Sports” from The Economic Populist, Senior Legal Fellow Katie Van Dyck distills it down:
Welcome to the vanguard of a declining culture.
There are potential laws that can stop private equity form its predatory behaviors.
Limits on debt loading
Repealing deductibility of PE debt
Making PE ownership entities and individuals responsible for liabilities in the event of bankruptcies
Stronger anti-trust scrutiny
Getting rid of the carried interest loophole
Block serial roll-ups (in this case, buying up mom-and-pop ice rinks)
There’s more. But what is most difficult to change is this:
“We don't place any value on the Vipers. We don't think it's worth anything, and so we just went ahead and started our own.”
Because I, for one don’t want the joyous photo at the top of this post:
To become this:
