EXCLUSIVE: ALLCITY Network Raises $12 Million Series B, Launching Its 5th Market In Dallas Later This Month
ALLCITY Network is one of the country's fastest-growing sports media startups. Now, with a $12 million Series B and TEGNA partnership, they want more.
It’s no secret that sports media has changed a lot over the last decade. Newspapers. Radio stations. Regional sports networks. Many of the industry’s most recognizable names have suffered declining audiences and revenues, resulting in widespread layoffs and an uncertain future for an industry that many believed to be unbreakable.
This decline isn’t because people aren’t watching sports. In fact, many American sports leagues (think: NFL and college football) are setting viewership records, and there is now more advertising money in sports media than at any other time in history.
The difference is that fans are just consuming content in different ways. Instead of reading the newspaper, blogs are delivered right to their inbox. Rather than listening to a radio show, they tune into their favorite podcast at whatever time is convenient.
This is precisely why ALLCITY Network has found product-market fit. The fast-growing sports media company has officially raised a $12 million Series B, pushing its total funding north of $25 million.
ALLCITY’s Series B was led by public broadcast company TEGNA, which we will revisit later. But other ALLCITY Network investors include Andre Iguodala’s venture capital firm Mosaic, Bullpen Capital, the Tellem family (Detroit Pistons ownership), Minnesota Timberwolves president Tim Connelly, NBA head coach Chauncey Billups, Brooklyn Nets GM Sean Marks, Klutch NBA agent Andy Miller, former Action Network CEO Patrick Keane, legendary investor Roger McNamee, Indianapolis Colts COO Peter Ward, and Miami Heat Vice President Adam Simon.
Full disclosure: I also own equity in ALLCITY (because I think it will be huge).
The ALLCITY business model is pretty simple. Like other sports media startups, they hire great talent to build an audience that can be monetized through advertisements.
However, the difference with ALLCITY is that they almost exclusively focus on building a network of local sports content. For example, rather than competing with big networks for national writers, ALLCITY will hire the most popular radio host or reporter in a big sports town and pay them to launch their own exclusive podcast.
These personalities operate local sports networks that deliver 6-10 hours of original, live-streamed sports talk daily in each city. These team-specific shows are hosted by the most important reporters and hosts for each team in that community, and they are all shot live in branded studios with three-camera setups and graphic integration.
ALLCITY’s credentialed reporters also publish free and paid written content on city-specific websites, providing millions of local sports fans with a diversified offering of video, audio, and written content that is updated several times throughout the day.
The secret sauce is that ALLCITY doesn’t have to pay broadcast fees, signal costs, license fees, or carriage fees. Instead, ALLCITY allocates most of its budget to simply hiring the best (and most popular) talent in each new city they launch.
ALLCITY is already live in four of the country’s top 20 sports markets: Philadelphia, Chicago, Phoenix, and Denver. The company is launching its fifth market, Dallas, later this month, headlined by popular NBA reporter (and Substacker) Marc Stein.
ALLCITY has the #1 podcast (combined audience) for 23 of the 24 teams they cover. The network will surpass a combined audience of 100 million this year, not counting social media, and the average listenership per podcast download is 50 (!!) minutes.
Even more impressive, ALLCITY has turned this attention into eight figures of annual revenue, and all four of the company’s current markets are either operating at cash flow positive today or will be cash flow positive within the next 60 to 90 days.
The majority of ALLCITY’s revenue comes from advertising. The business currently has active ad campaigns with 50 brands, including Ford, Toyota, and Coors Light.
The influencer-led, local model has enabled ALLCITY to re-sign advertisers at a ridiculous rate of 80%, and the company just signed a multi-million dollar deal that makes Bet365 their exclusive sports betting partner in ALLCITY’s first four markets.
It’s not just ad revenue, either. ALLCITY has a robust membership platform with thousands of subscribers. Their merchandise business is doing seven figures in annual revenue, and they even own a sports bar in Denver, work with athletes to host golf tournaments in the offseason, and hold several massive tailgates throughout the year.
However, this is really just the beginning for ALLCITY and its growing business.
ALLCITY’s sales team will continue to get more efficient as the business grows, mainly because the network effect will allow them to move from regional to national advertising deals. The best example is the company’s fifth market, Dallas, which will launch later this month with eight pre-sold advertising partners on day one.
TEGNA’s investment is also a big deal because they own just under 30% of the country’s local television market — and the investment includes a commercial agreement for TEGNA to provide promotion and TV distribution in each city that both of the companies operate in (think: airtime on TEGNA’s network of channels).
This is why I’m betting on ALLCITY to be successful. The company is about to launch city-specific FAST channels that will bring a 24/7 local sports network to fans of the teams they cover. ALLCITY is only in four markets right now, but CEO Brandon Spano tells me they have identified 30 U.S. markets that fit the local sports model. And that’s without even considering the fact that ad dollars will continue to move from traditional platforms (radio, etc.) to digital platforms (podcasts, etc.).
So make sure you are paying attention. The sports media landscape is changing rapidly. Fans are consuming more content, just in different ways, and ALLCITY has positioned itself more than anyone else to take advantage of that shifting dynamic.
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I hope everyone has a great weekend. We’ll talk on Wednesday.
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