OUR DAILY THREAD: Private Equity Is Having A Ball

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THE SET-UP: Imagine how many times per day a harried parent races home from work to pick up their kid, throw the kid’s gear in the trunk and rush them to a field, a pitch, a court or a rink for an organized game or match.

Now, imagine you are that parent and your hockey stick-wielding kiddo is starting for the first time at right winger. Of course, you’ve made sure your phone is fully charged for the big debut …not only for yourself, but also for grandma and grandpa. They’ll be watching the livestream of their beloved grandkid’s first start of the season. And just when the puck is about to drop and your smartphone is ready to record, you get a tap on the shoulder from another parent. She leans forward and says in a hushed tone that you probably should put the phone down because she “heard we could be docked points in the standings if parents are caught filming their kids.”

That sounds ridiculous, right?

Well, that’s exactly what hockey dad Chris Murphy heard when he approached a fellow hockey dad “sheepishly recording his son from a dark corner of the rink” during their sons’ youth league game. Murphy, who happens to be Connecticut’s junior Senator, writes in The Atlantic that he was “shocked” to learn the reason why the league—which is run by Black Bear Sports Group—proscribed parental shutterbugging:

Black Bear had installed cameras in each rink that feed video footage into a subscription service—Black Bear TV—that charges parents as much as $37 a month. Subscribers can watch games remotely and must pay for the “premium” tier to share highlights, such as their daughter’s game-winning goal, with relatives. Of course, Black Bear could have allowed parents to livestream games to family members and still made money off the low-cost, AI-operated camera system. But that, apparently, wasn’t enough for the executives, so the company banned parents from streaming games for grandparents or the mother or father who didn’t drive two hours to the rink.

And why wasn’t it “enough for the executives”?

Two words: Private equity.

[F]or the owners of the Atlantic Hockey Federation—the youth-hockey association that pulls together elite teams from Connecticut and many other states, as far west as Arizona—kids’ sports is a cutthroat business, a way to make a handful of people very rich. Black Bear Sports Group owns the AHF, several other youth hockey leagues, and many of the rinks where the teams practice and play. Methodically and quietly, Black Bear—backed by the private-equity firm Blackstreet Capital Holdings—is tightening its stranglehold over the youth-hockey infrastructure along the Eastern Seaboard. Whereas [Murphy’s son] Rider sees hockey as character-building fun, Black Bear’s objective is far simpler: to make a grotesque amount of money.

Here’s how Blackstreet describes itself:

Blackstreet Capital Holdings, LLC is a privately held diversified operating company that owns and manages lower middle market businesses. Blackstreet Capital Holdings, LLC is not a private equity fund. Instead it is a permanent holding company that seeks opportunistic investments in debt and equity of lower middle market ($25-$150 million in revenue) businesses that are typically underperforming, under financial distress and/or in out of favor industries. Blackstreet seeks opportunities in a range of industries including education, manufacturing, consumer products, sports and entertainment, distribution, retail, technology, consumer finance and franchising. Currently, Blackstreet has 8 subsidiaries.

Note their focus on “lower middle market ($25-$150 million in revenue) businesses that are typically underperforming, under financial distress and/or in out of favor industries.” The list of their targets includes: manufacturing, distribution, retail, education, consumer products, sports and entertainment, consumer finance, healthcare and technology. They are forever looking to find the weakest businesses in those herds. But the canary may well be the traditional model of youth sports which, as Murphy describes, was…

…managed primarily by local park departments, parent-led leagues, and nonprofit groups such as sPop Warner and the Catholic Youth Organization. Parents’ dues went to support their work, not to maximize outside investors’ returns. The extent of commercialization was limited to a handful of local businesses donating a few hundred dollars to sponsor teams (my very first Little League team was sponsored by Dillon-Baxter Funeral Home, and our main rival was the team sponsored by Dillon-Baxter’s main rival, D’Esopo Funeral Chapel). Youth sports were mostly treated as a public good.

But not anymore.

As Sen. Murphy, who just co-sponsored legislation to ban private equity in youth sports, also notes:

Billion-dollar private-equity groups are rapidly buying up leagues and affiliated services. For instance, Varsity Brands, a company owned by the private-equity firm KKR, has a dominant position in youth competitive cheerleading.

From the perspective of pure, Milton Friedman-style, supply-siders … profiteering, publicly-run, not-for-profit youth sports was and is ripe for the picking.

The Aspen Institute’s Project Play initiative keeps track of youth participation in organized sports and, as of their last tabulation in 2023, an estimated “27.3 million youth ages 6-17 participated on a sports team or took sports lessons afterschool or on weekends.” That translates to 55.4% of America’s kids playing organized sports, which has ballooned to a $40 billion per year industry.

Now in 2026, the overall number is likely closer to 30 million kids. Either way, that’s a lot of kids and a lot of money. And parents are usually highly-motivated to bend over backwards to get their kids into sports, particularly as one study after another shows youth participation in team sports leads to great outcomes. Parents want their kids to thrive and they don’t want their kids left out. In other words, they and their kids present something of a captive market, particularly as leagues running public interest-based models that rely on kids selling candy bars and coupon books … get crushed by slicker, well-financed alternatives by Blackstreet, KKR, and BPEA EQT, among others.

Amazingly enough, just one day after Sen. Murphy’s piece (which was excerpted from his presidential run-teasing book) fingered Blackstreet and its appetite for “lower middle market” opportunities … Mergers & Acquisitions published a “news analysis” piece titled ”The New Battle for the Lower Middle Market: How to Win Over Owners Who Don’t Want to Sell.”

The accompanying tease for the piece asks “What does it take to convince a hesitant potential target to sell?” and invites circling vultures “hunting for deals in today’s sluggish M&A market” to “read on to find out” how to convince reluctant, “founder-owned businesses that, in many cases, have never seriously considered a sale”

And the answer is … “psychology”:

In today’s environment where competition for quality assets is extremely intense, the firms winning mandates are often the ones that can convince hesitant owners they’re buying more than a company — they’re becoming stewards of a legacy.

Stewards of a legacy? Private equity? Is that how they’ve been able to gobble-up mom and pop HVAC shops in Idaho? And bowling alleys, car washes, dental practices, veterinary clinics, bakeries, ice cream shops, handyman business and mobile home parks?

Private equity’s track record of stewardship is at best lackluster. Even worse, the endgame for private equity is the opposite of legacy preservation … it’s all about the profitable exit. Every asset they buy has an exit in its future. Along the way, the asset made be bled and the carcass pieced out. Or it will be rationalized and overhead cut for a maximum return as they head out the door.

But there is a problem brewing.

Private Equity is buying up all sorts of assets because, like sharks, they have to keep on moving to live … in PE’s case, their lifeblood is attracting and retaining investors. But, as Forbes reported back in April, the exits are “clogged” and the assets are piling up:

Bain estimates that the industry is sitting on roughly 32,000 unsold companies worth $3.8 trillion. Average holding periods have stretched to around seven years, compared with the five-to-six-year pattern that defined much of the prior decade. McKinsey also estimates that assets held longer than four years now represent 52% of total buyout-backed inventory, the highest level on record.

Forbes observed that it “creates a strange but logical reality” wherein firms “may still need to buy” despite not being able to sell. They are squaring that circle by investing in “smaller, more controllable opportunities” … a.k.a. mom and pop shops they have to psychologically cajole into believing their legacy is safe with them when, in fact, it is just a matter of time until it is sold or parted-out like Buick with a blown head gasket.

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Private Equity-Owned Retinal Practices Perform Fewer Retinal Detachment Procedures
https://www.forbes.com/sites/peterubel/2026/05/20/private-equity-owned-retinal-practices-perform-fewer-retinal-detachment-procedures/

Private Equity Hospitals Linked to Worse Outcomes for Patients With COPD
https://www.docwirenews.com/post/private-equity-hospitals-linked-to-worse-outcomes-for-patients-with-copd

New report raises questions about private equity Medicaid contractors
https://pestakeholder.org/news/new-report-raises-questions-about-private-equity-medicaid-contractors/

Private capital’s $1 trillion bet on the American retirement account
https://www.investmentnews.com/retirement-planning/private-capitals-1-trillion-bet-on-the-american-retirement-account/266697

North Carolina private equity firm acquires part of Jay Industrial Repair
https://www.bizjournals.com/birmingham/news/2026/05/21/private-equity-buys-part-of-jay-industrial.html

Trinity Hunt Partners Forms Elevation Landscape Group With Investment in Landscape Endeavors
https://www.businesswire.com/news/home/20260521677924/en/Trinity-Hunt-Partners-Forms-Elevation-Landscape-Group-With-Investment-in-Landscape-Endeavors

Private-equity firm buys apartments in Seattle as deal flow slows
https://www.costar.com/article/349190913/private-equity-firm-buys-apartments-in-seattle-as-deal-flow-slows

Private equity firms now own 1 in 8 American apartments
https://pestakeholder.org/news/private-equity-firms-now-own-1-in-8-american-apartments/

Private Equity Is Buying REITs Hand Over Fist
https://seekingalpha.com/article/4905911-private-equity-is-buying-reits-hand-over-fist

Private Equity’s NFL Buying Spree Continues With Browns Deal At $9 Billion Value
https://www.benzinga.com/markets/private-markets/26/05/52701116/private-equitys-nfl-buying-spree-continues-with-browns-deal-at-9-billion-value

The NFL’s private equity obsession threatens competition
https://sports.yahoo.com/articles/nfl-private-equity-obsession-threatens-175850720.html

Notable Utah Alum Says Private Equity Deal ‘Sold Off Their Future’
https://www.heartlandcollegesports.com/2026/05/20/notable-utah-alum-says-private-equity-deal-sold-off-their-future/