Dave Checketts and the Eccles family come full circle with joint venture

When Dave Checketts and the Cynosure Group formed a joint venture private equity sports fund in April, it seemed like a partnership that had been destined to happen. The relationship between the two has its roots in a turnaround NBA story with a sprinkling of finance – and basketball is just one of the sports in which the pair are looking to sign deals today.

Checketts and Spencer P Eccles, co-founder and managing director of Cynosure, walked PE Hub through their history and their plans as they became the latest of our Dealmakers to Watch.

One could argue that the beginnings of the fund – named Cynosure | Checketts Sports Capital and looking to raise at least $1.2 billion – began over 40 years ago. That was when Checketts took over the Utah Jazz as team president in 1983 at the age of 28, becoming the youngest person in the league’s history to take on the role.

Running the Jazz was a challenge. When Checketts joined, the club was deep in debt after moving from New Orleans in 1979, was losing money and had never made the playoffs. “It was only attracting 6,000 people per night,” Checketts told PE Hub. “I was being outdrawn by the local triple A minor league hockey team. They were getting 8,000 a night, and we were getting 6,000 a night for the NBA, and things had to change.”

The change would come soon. The Jazz drafted future Hall of Famers John Stockton and Karl Malone in 1984 and 1985, respectively. But even though play on the court improved, the team’s finances were a blocker. “I was looking all over town to find anybody with any money to put in, recapitalize the team and pay off the debt, and I couldn’t find anyone,” Checketts said. “I tried a number of groups and finally ended up with a small car dealer.”

That car dealer was Larry Miller, who bought half of the team for $8 million in 1985. Also involved in the deal was Spencer F Eccles. Then the chairman of First Security Bank, Eccles went to the board of the bank and helped put together an $8 million loan that helped the Jazz pay off the debt. “We had $2 million of working capital, and that gave us wings to build the business even bigger,” Checketts said.

Forty years after the deal that kept the Jazz in Utah, Checketts and the Eccles family are working together again, this time with Cynosure’s Spencer P Eccles, the son of Spencer F Eccles. Headquartered in Salt Lake City, Cynosure has four lines of business including private equity and debt, foundation and endowment management, ultra-high-net-worth wealth advice, and quantitative liquid asset strategies.

“We typically take a minority position in the company with the companies and founders with whom we invest,” Eccles told PE Hub. “It means we’ve got to have a strong relationship. We are conservative in the debt we use, very conservative, especially by industry standards. That means you have to be investing in businesses that are sustainable.”

On a mission

There aren’t many résumés more decorated in sports than Checketts’. After working with the Jazz, he was president of the New York Knicks and president and CEO of Madison Square Garden. He’s been an owner of the St Louis Blues of the National Hockey League and Real Salt Lake of Major League Soccer. Checketts also spent time as chairman and CEO of Legends Hospitality Management. He is director and part owner of Burnley Football Club in the UK.

Today, Checketts is the managing partner of Checketts Partners Investment Management, a New York-based private equity firm focused on sports, media and entertainment investments. Funds from the firm, which was founded in 2011, have acquired stakes in Gravity Media/EMG, a provider of broadcast and media services for the sports and entertainment industry, and Rhone Apparel, a performance activewear and wellness brand founded and controlled by the Checketts family.

Checketts has had the idea of starting a sports fund for some time, but other activities had taken priority. In 2018, he was asked by the Church of Jesus Christ of Latter-Day Saints to go to England to serve as mission president in London and supervise the efforts of hundreds of missionaries. “When you do that, you don’t really have time to do anything else,” Checketts said. “I shut down pretty much everything else I was doing, except for Gravity Media. I still stayed on the board of that, but everything else literally ended.”

When he returned home in 2021, Checketts knew then that he eventually wanted to create a sports fund. In January, Checketts laid out his idea to Eccles and Randal Quarles, Cynosure chairman and co-founder. It would be a 50-50 split joint venture fund that would invest in sports. “[The sports industry] just seems fairly cyclical or fairly able to get through bad economic times, as well as flourish during really good times,” Checketts said. “Based on my experience with team media assets, I thought we should raise a fund. And they were, from the beginning, very enthusiastic about that idea.”

Checketts and the Eccles family have that connection from the 1980s in Utah. “When we started having conversations with Dave, it was crystal clear that we had immediate alignment,” Eccles said.

Going global

Cynosure | Checketts Sports Capital is looking to make around three to four investments, possibly five, from the fund. “We’re not going to do small deals at all,” Checketts said. “We’re looking to do bigger deals. With the values of franchises these days, I don’t think that would be too difficult.”

The fund wants to invest in professional and collegiate sports teams; sports leagues and governing bodies; stadiums, arenas and other sports facilities; sports technology and innovation companies; and media rights and broadcasting ventures. The investment approach will be global.

Checketts said he likes English, Spanish and German soccer. “Those are very interesting markets,” he added. “I also like the fact that the NBA is talking about putting another league in Europe. I would love to participate in that, since much of my career has been building NBA teams.”

Cynosure | Checketts Sports Capital is also looking at media assets and Women’s sports leagues such as the WNBA and three-on-three start-up women’s basketball league Unrivaled.

Editor’s note: This article is part of an ongoing series of profiles launched by PE Hub called Dealmakers to Watch. The series features private equity professionals as they pivot to new challenges, such as moving to a different firm, launching a new firm, getting promoted to partner, launching an investment strategy, closing a significant deal or some other new endeavor. If you’d like to see a dealmaker profiled, reach out to PE Hub editor-in-chief Mary Kathleen (MK) Flynn at mk.flynn@pei.group.