When the refrigeration system failed at an ice rink outside Kalamazoo, Michigan, last September, the Kalamazoo Optimist Hockey Association—whose club had skated there for six decades—was suddenly without a home rink. A month later, a private investment firm bought the building for $3.5 million and promised to reopen it. No local buyer could have moved that quickly.
KOHA is a nonprofit with two full-time employees that serves 600 families and nearly 800 kids. Its executive director, Matt Kakabeeke, wanted his club back at its home rink. So, on October 16, he sat down with the investment firm’s regional director to talk terms.
What followed, he says, was less a negotiation and more a list of hard conditions.
The rink, Kakabeeke says he was told, would be renamed for Biggby Coffee, a regional coffee shop franchise the firm had signed as a sponsor. If his club returned, it would be rebranded as the Biggby Broncos, replacing local Kalamazoo businesses that had sponsored its jerseys for years. Uniforms and team apparel would be outsourced to a vendor in New Jersey, from which the firm takes a royalty on every sale. Parents would be prohibited from livestreaming or broadcasting their own kids’ games. Instead, the games would run on the firm’s proprietary streaming service, which as of this writing, charges families $215.99 a year to watch, or $329.99 for the premium tier that lets them share their own kid’s highlights.
The list went on.
Kakabeeke pushed back. After multiple meetings and little movement, Kakabeeke recalls telling the firm, “Every time we get on a call with you, it just feels like KOHA is stacking up losses and Black Bear is stacking up wins.”
Black Bear Sports Group is the largest owner-operator of ice rinks in the United States, with nearly 50 across 12 states. It was founded in 2015 by Murry Gunty, who also founded Blackstreet Capital Holdings, a Maryland firm that describes itself as a permanent holding company rather than a private equity fund. Black Bear CEO Kevin Kuby, who is also an executive vice president at Blackstreet, says Blackstreet is a minority owner.
Black Bear also owns many of the youth clubs that skate in those buildings, the scoring software that tracks those games, the streaming platform that broadcasts them, and two youth leagues: the National Girls Hockey League and the Atlantic Hockey Federation, which draws teams from across the country, from Connecticut to Arizona.
This playbook is not new. According to a USA Today investigation, Black Bear bought a rink outside Pittsburgh in 2021, offered the parent-run nonprofit that skated there $1 for its youth teams, and after the board refused, told parents it would no longer rent ice to most of them. The association’s board voted to fold its 60-year-old Pittsburgh Vipers program in February 2024. Senator Chris Murphy wrote in The Atlantic this spring that the company is tightening its grip on youth hockey infrastructure along the Eastern Seaboard, including the Connecticut league in which his 14-year-old son plays, and many of the rinks in which it plays. In May, Murphy introduced legislation that would ban private equity from youth sports altogether.
By late fall, the Kalamazoo talks had moved to a series of Zoom calls. On one of them, Kakabeeke says, the regional director told him that if KOHA didn’t do what the firm was asking, its ten-year-olds could find themselves skating at nine o’clock at night. Black Bear did not respond to questions about the exchange. The company says the Kalamazoo rink was headed for permanent closure and that its investment will give local families a choice of programs.
Black Bear is just one company inside a much larger private equity buying spree. In the past two years, KKR paid $4.75 billion for Varsity Brands, the Asia arm of Sweden’s EQT paid $1.25 billion for IMG Academy, and Eli Manning’s private equity firm bought RCX Sports, which operates the official youth leagues of the NFL, NBA, MLB, and three other pro leagues.
What appeals to investors about youth sports is pricing power that almost nothing else in consumer spending can match. American families spend more than $40 billion a year on youth sports—nearly twice the NFL’s annual revenue—and the average household now spends $1,016 a year on a child’s primary sport, a 46% increase since 2019 and roughly double inflation. According to Katie Van Dyck, senior legal counsel at the American Economic Liberties Project, youth sports offers “a captive audience and extremely inelastic demand in the form of parents who are just trying to provide the best opportunities for their kids.”
The argument now in Congress is about whether private equity belongs in youth sports. But it’s already there. The more useful questions are: What is it building? And who’s keeping score?
In this Fast Company exclusive, you’ll learn:
- The very different operating models among private investment groups
- How to spot private equity owners who’ll be far more interested in financial returns than the quality of a young athlete’s experience
- The three questions every parent or youth sports administrator should ask about a prospective league acquisition
The vertical integration playbook
Private equity didn’t force its way into youth sports. It walked through a door that opened when public money left.
Between 2009 and 2013, American parks and recreation budgets fell roughly 21%. COVID delivered a second blow. Municipalities stopped building rinks and fields and stopped maintaining the ones they had, and no federal agency exists to coordinate what replaced them. “Youth sports should not be a luxury good,” Van Dyck says, but the public infrastructure that kept it from becoming one was dismantled over fifteen years, mostly without anyone voting on it.
Enter private capital. And for it to succeed, the math has to work.
Ice rinks are expensive to run. Tony Zasowski, Black Bear’s co-president, counts four costs that never stop: energy, insurance, professionalizing the coaches, and staffing. And hockey runs September through early April, nights and weekends, which means paying to keep a sheet of ice frozen in a building nobody is using the rest of the year. Sell nothing but ice time and the hourly rental rate is the only lever available. “If that’s all you can control,” Zasowski says, “you’re at your ice rate.”
So Black Bear controls more. Wherever possible, in addition to the real estate, it owns the clubs, the leagues they play in, the tournaments they travel to, the software, the streaming, the royalties on merchandise—whatever it can. “Instead of having money leave the building,” Zasowski says, “we keep it inside the building.”
In emails provided to Fast Company, Scott Branovan, Black Bear’s regional director, laid out the same logic to Kakabeeke the day after their first meeting. Sponsorships, streaming, and online team stores, he wrote, were part of the economic equation required to achieve sustainability “and provide for some investor return.”
It’s the same vertical integration strategy investment firms have deployed in veterinary clinics, nursing homes, and hospitals. Those industries offer a preview of how it can end. In Hartford, as Fast Company reported recently, a private equity-backed owner sold the real estate out from under three hospitals, saddled the chain with more than a billion dollars in debt, and paid itself and other investors more than $600 million in dividends and fees before the hospitals went into bankruptcy.
What draws capital to youth sports is what drew it to those industries, and Van Dyck says youth sports is vulnerable to the same approach. “The attraction of youth sports investment,” she says, “is all of the different points of extraction that are available.”
Between the 2024-25 and 2025-26 seasons, USA Today found, Black Bear raised prices for 142 of the 209 in-house teams that posted them—increases of $100 to $400 per player, with the steepest hitting nine- to 12-year-olds. At Kensington Valley, a nonprofit hockey association in Brighton, Michigan, the ice rate at the Black Bear-owned rink went from $320 to $370 an hour.
Three different private investment models
Private capital in youth sports doesn’t come in one shape. Black Bear owns buildings and nearly everything that happens inside them, generating revenue from nearly every related transaction. But two other private investor groups operate differently. All three are profitable, but what that profitability costs families is not the same.
High Velocity Sports (HVS) represents one alternative model to Black Bear. Bryan Finnerty owns the HVS indoor sports complex in Canton, Michigan, about a hundred miles east of Kalamazoo, built with money he raised from private investors. It runs soccer, basketball, volleyball, and lacrosse—roughly 400 teams in an eight-week winter session, all of it organized in-house. It’s also among the largest facilities of its kind in the country.
Around 2000, Finnerty was director of coaching for a soccer club outside Detroit that had grown from 600 kids to nearly 3,000, and every winter he watched those families drive all over Michigan hunting for indoor field time. To provide a solution, he targeted a $7 million building in Canton, but couldn’t afford it himself. He raised $1.4 million from private investors, signed a personal guarantee, and opened the complex in 2001. Within two years, High Velocity was profitable.
But it’s never been a cash cow. People see the parking lot packed on a Saturday, according to Finnerty, and say: “My gosh, you guys must be printing money!” They don’t consider the costs—turf replacements, air conditioning, insurance, payroll. Margins, Finnerty says, typically run around 10%.
At those margins, who fills the building matters. Roughly 80% of High Velocity’s athletes are recreational players, while the rest play on competitive teams. Finnerty says keeping it that way is a decision based on both business and principle. “Eighty-twenty doesn’t mean that I’m giving up profit and being overly civic to my own demise,” he says. “We like 80–20 because it creates a really wide base for us, and quite frankly it fits the ethos of our facility, which is all kids should have access to play whatever sport or activity they want. Our job is to offer it to them at a competitive price, where we still have a profit.”
Offer one sport and a kid who quits takes the family checkbook with them. Offer four, and that kid plays soccer in the fall and basketball in the winter, or gives up on soccer entirely and lands on lacrosse. Either way, the family stays up to 36 weeks instead of 12. “You don’t have to buy the lie that your kid’s got to specialize at eight years old,” Finnerty tells parents.
RCX Sports represents a third model. It occupies a different position in the same market as HVS, but at a national scale. Founded and run by Izell Reese, RCX operates the official youth leagues of the NFL, NBA, WNBA, NHL, MLB, and MLS. Since 2019, it has grown NFL Flag from 200,000 participants to more than a million this year. It has also built programs that didn’t previously exist, including NHL street hockey and Junior NBA and WNBA leagues. In June, Brand Velocity Group—the private equity firm co-founded by Eli Manning—acquired the company.
Unlike High Velocity, RCX’s customer is not the family. It’s the league operator: parks departments, YMCAs, independent clubs. RCX supplies what a volunteer-run league can’t easily assemble on its own—officials training, coaches training, rulebooks, and the governance around all of it. “I equate us to Little League baseball,” Reese says. “There is a governance in place and a structure that keeps Little League that has withstood the test of time.”
RCX also uses its size to bring down what operators pay for everything else. Insurance, registration platforms, background checks: all of them are for-profit businesses, Reese says, and all will negotiate for access to the million-plus kids across its programs. That allows operators to pass the savings to families at registration. At one parks department RCX works with, in Enterprise, Alabama, registration is $40.
None of it works without capital. “I can’t grow and scale without resources,” Reese says. “I can’t even keep prices down without resources.”
Having partnerships with six professional leagues is an advantage nobody else has. That also comes with oversight. The leagues aren’t paying Reese for margin. His job is to grow the game. “When the pro leagues come to us, we gotta be able to drive participation for them,” he says. “That’s the value-add of what pro leagues want to see.”
What this means is that there is someone policing RCX. Six partners with the standing to walk away are watching one number, and it’s not revenue—it’s how many kids are playing.
Manning, who has four kids in youth sports, put it more directly when asked whether private equity ownership would raise prices. “This isn’t about raising prices for families,” he told Front Office Sports. “This is about keeping prices low and adding access so that more kids can play sports.”
Black Bear makes a strong case that it’s growing the game too. Its free Take a Shot at Hockey program put 3,500 first-time players between the ages of four and nine on the ice in its first season, the company says, and roughly 5,600 kids have come through its Learn to Play program, which provides free equipment players keep. Black Bear says participation in the states where it operates grew 9% last season, from 5,515 players to 6,008, while USA Hockey’s national registration rose 1.6%.
That’s three companies, all backed by private capital, all profitable, all selling more than their core product, all growing participation in their programs. From the outside, they are difficult to tell apart. What separates them is who they have to answer to. RCX answers to six professional leagues that measure participation and can take their names back. Finnerty answers to a personal guarantee and a community he lives in.
Black Bear answers to its investors.
What parents don’t know
Tom Farrey has spent two decades studying American youth sports as director of the Aspen Institute’s Sports & Society Program. Ask him what’s wrong with the industry, and he starts with what it lacks.
“We are the only nation in the world that does not have a Department of Sports or a Ministry of Sports or some entity to coordinate sport development,” Farrey says. “So we just have a lot of money and a lot of energy moving at cross purposes.”
This is one reason the Black Bear debate is hard to settle. Farrey does not dispute the economics. “Hockey is the most expensive team sport by far,” he says, “and that was before Black Bear even got into this.” He points out that hockey was also the first American travel sport, dating to the 1970s, which means the expectation that families would spend heavily on it predates private equity by decades. And many rinks are municipally owned and not especially viable, he says. A number would go out of business without an outside entity stepping in to make them work. Black Bear says it has put $20 million into its rinks over the past three years, roughly $400,000 on average per venue—more than most local operations could cover.
What nobody can establish is what families get for their money, because no one is required to tell them. Parents believe sports are good for their children and pay accordingly, Farrey says, but they have no real assurance or even information about what kind of programs they’re being asked to sign their kids up for. A parent has no way to check whether the coaches have been properly vetted. No way to confirm anyone on the ice is trained in injury prevention. No way to find out whether the program follows the American Development Model, the framework endorsed by the U.S. Olympic Committee and the national governing bodies.
They also don’t know how much of their money is going back into their programs to benefit their children versus how much is going to the company and its investors.
“Parents have no idea,” Farrey says. “They worry that the kid will be left behind unless they hop on that travel team bullet train in second and third grade.”
What we do know is that children from lower-income households play sports at lower rates than children from higher-income ones, and that the gap is widening. In 2012, 35.5% of children from households earning under $25,000 regularly played sports, against 49.1% of children from households earning more than $100,000. By 2024, that 13.6-point difference had grown to 20.2.
Asked whether Black Bear is doing enough to keep hockey accessible, Farrey declines to render a verdict. “I can’t necessarily answer that,” he says. “I don’t know. That’s the question to ask.”
Nobody is required to produce the numbers that would answer it.
“You know it when you see it”
Michigan’s attorney general opened an inquiry into anticompetitive practices in youth hockey in April. In May, Senator Murphy and Representative Chris Deluzio introduced the Let Kids Play Act, which would restrict private equity ownership in youth sports.
On June 1, Black Bear, which had never before registered a federal lobbyist, paid a Washington firm $30,000 to lobby Congress on “issues related to youth sports.”
Four weeks later, on June 30, Kakabeeke took a seat at a witness table in Washington and told a House subcommittee what had happened in Kalamazoo.
The hearing was called “Field of Fees”: Private Equity’s Role in the Commercialization of American Youth Sports, the second time in seven months that the Education and Workforce Committee had discussed the subject.
Farrey, of the Aspen Institute, thinks the Let Kids Play Act is aimed at a target nobody has defined. “The first is the question of what exactly is private equity,” he says. “Are we talking about an organization, an entity that is wholly owned by private equity versus an entity that private equity is maybe a minority shareholder in?” He also questions the premise underneath it. “Should we assume that all private equity is automatically bad?”
Van Dyck, who testified at the first hearing in December and again in June, agrees the term is slippery and says that is exactly why the bill goes after conduct rather than corporate form. “Private equity is a looser term,” she says. “It’s sort of a you-know-it-when-you-see-it sort of thing in some ways.” The vagueness, she says, is largely what has allowed these companies to escape congressional scrutiny.
Black Bear sits at the center of that problem. The company says it is not private equity but a long-term investor, and in 2025 it hired a crisis communications firm that worked to distance it from investment language and from Blackstreet Capital Holdings. Yet the emails Branovan sent to KOHA carry a footer advising recipients not to use email to authorize the investment in any security, and noting that the views expressed may differ from those of Blackstreet.
Van Dyck doesn’t accept the distinction. “Black Bear is really making a concerted effort to say, ‘We’re not a private equity firm, we’re long-term investors,'” she says. “But that doesn’t mean that they aren’t doing a lot of the same things that short-term investment funds are employing to extract from their portfolio companies and consolidate industries.”
Nobody agrees on the fix
However these companies are defined, the harder question in the room was what to do about them.
At one point during the June hearing, a subcommittee member brought Norway into the conversation.
Norwegian youth sports run on a document called Children’s Rights in Sports, written in 1987. No scores or standings before age 11. No national championships before 13. No selection-based travel teams before 13. Clubs are local and run by volunteers.
The results are hard to argue with. A Norwegian family typically spends less than $1,000 a year per child. An American family spends $1,016 on one sport. About 93% of Norwegian kids play organized sports, some 40 percentage points above the American rate, and Farrey’s program at the Aspen Institute has identified Norway as having the most socially effective sports system in the world. The country now wins more Winter Olympic medals than the United States, with a population the size of Minnesota.
HVS’s Finnerty, who built his complex with private investment, rejected the comparison outright. His objection was not to what Norway produces but to how it gets there: a system underwritten by public money and governed by rules imposed from the top, in a country that agreed to both.
“We are not a socialistic society,” he said. “The founding fathers of our country created a society where we’d have choice in capitalism.”
What surprised Finnerty more was a belief he heard in the room that if you removed private capital from youth sports, communities would simply fund it themselves. “That’s hundreds of billions—with a B—dollars statement,” Finnerty says. “And it’s just not feasible. It’s not even responsible.”
If that money existed, he argues, we should spend it on schools first.
At least one member of the subcommittee defended Black Bear by name. Rep. Mike Rulli of Ohio pointed to the Covelli Centre in Youngstown, in his district, which he said received more than $1.2 million in renovations from the company. “There are communities all around the country that need outside investments like poor rural towns,” Rulli said.
Van Dyck’s fix is a ban on vertical integration in youth sports, plus mandatory ownership disclosure. Farrey wouldn’t ban anything. He wants the national governing bodies given enough power to see what is happening in their own sports. Give USA Hockey, USA Swimming, US Soccer, and others “the sufficient amount of authority to know who is offering programs in their particular sport,” he says, “and begin to promote best practices and adherence to best practices throughout the ecosystem.”
“Otherwise,” Farrey adds, “it’s just a wild west.”
The one thing the room agreed on was the goal. “Our concern today is with particular practices that reduce competition, drive up costs and limit access for families,” Rep. Kevin Kiley of California, who chairs the subcommittee, said. “We should encourage models that expand opportunity while discouraging practices that leave parents with fewer choices and higher bills.” The consequence of getting it wrong, Kiley said, is a widening participation gap.
Mark Baliff isn’t waiting for Congress to sort it out. He runs KOHA’s recreational program, the entry point for kids who aren’t on a travel roster, and he does it for less than $5,000 a year because he grew up on municipal ice and wants other kids to have the same experience. Asked what he’d tell the next town this happens to, he never mentions Washington.
“Try to get municipalities involved,” he says. “Go through the government channels, get funding, get whatever’s needed to keep it out of those hands. Try to keep things grassroots, because you don’t want some corporation running your little league team.”
Three key questions to ask
Black Bear announced in March that the Kalamazoo rink would reopen in June, ahead of the 2026-27 season, and opened registration for its learn-to-skate and beginner programs in April. In late June, two days before a scheduled community skate, the company postponed the reopening. As of mid-August, per a company spokesperson, skating has resumed and TASH classes have begun.
KOHA is skating elsewhere, renting hours wherever it can find them across the region.
Back in November, during negotiations with KOHA, Kakabeeke says Black Bear’s regional director had proposed replacing the organization’s annual fundraising golf tournament with a Black Bear-hosted celebrity hockey game. Teams would sell tickets and the proceeds would help offset the cost of ice, which would be set at rates determined by Black Bear.
A tournament that raised money for local families would become a tournament that raised money for the building.
By that point, nothing Black Bear proposed surprised Kakabeeke. “It just felt predatory,” he says. “Like the whole plan was to come in and not only own a rink, but also own all of the infrastructure that goes into it.”
Earlier this month, KOHA held its golf outing, named to honor two local boys, both former KOHA players, who each died at age 11, one of them Baliff’s son. The event sells out at 144 golfers and clears just under $20,000, which covers every scholarship the club grants. “It’s a day of healing for both families,” Baliff says. Upon learning of Black Bear’s proposal to replace the event, “I wanted to throw down my gloves,” he says. “You don’t just come in and throw that aside like it has no heart or feeling to it. It’s bullshit.”
Finnerty, the Michigan facility owner, suggests three questions parents and existing league operators should ask about any prospective acquisition in this business:
- Do more kids have access than before?
- Is anyone developing coaches?
- Are there scholarships for families who otherwise could not play?
He is careful about what the list leaves out. Prices rise for many reasons, he says. A dead refrigeration system costs real money, as does insurance, as does keeping a building cold. Private capital, he says, can keep expensive facilities open that would otherwise close.
What bothers him is what happens after the buying is done. Acquiring more buildings is supposed to create economies of scale and make each one cheaper to run, and the savings are supposed to reach the families paying to skate in them. “If I’ve acquired the leagues, the uniforms, the software, the concession vendors, the whatevers, and I raise the price,” he says, “quite frankly, something just doesn’t smell right.”
