In the continued fallout from the Relativity Media bankruptcy, supermarket magnate Ron Burkle announced Wednesday that he is committing $30 million to help expand Relativity Sports, where he said he will serve as chairman of the board.
Leaders at growing Relativity Sports used the announcement of Burkle’s increased involvement to make it clear that the agency — with 400 professional athletes under management — is not being dragged down by the parent company’s bleak financial performance and sagging reputation.
“Due to the agents’ hard work, Relativity Sports is a thriving business and is on course to have its most successful year yet,” Burkle said in a statement. “I believe that, with my continued financial backing, the company will be able to grow at an accelerated rate, which will be good for clients, agents and all involved.”
Burkle had previously invested in Relativity and its sports division. He is described in Wednesday’s announcement as a “founding board member” of Relativity Sports. The announcement said Burkle’s “increasing involvement” in the sports agency includes a $30 million investment that is described as “growth capital.”
While two agents had left the agency’s baseball unit, the firm’s press release said all of its senior agents have renewed their agreements. The statement said Relativity represents more than 75 major league baseball players, including some with “some of the largest contracts in the history of the game.” The company’s football division had more of its athletes chosen in the first round of the last NFL draft than any other agency.
“Relativity Baseball, coupled with our peers in the basketball and football divisions, is excited to continue growing one of the most prominent sports agencies in the world with this infusion of capital and resources,” said Mark Pieper, CEO of the baseball division.
An announcement earlier Wednesday from Relativity Media said the company’s CEO, Ryan Kavanaugh, had “terminated the employment of both Walters, the president of Relativity Sports, and Andrew Matthews,” the chief financial officer of the parent company. Sources inside the company disputed that, saying that Walters had told Kavanaugh weeks ago that he would no longer lead the sports division and would stay on only to help with the parent company’s transition through bankruptcy. (A U.S. Bankruptcy Court judge this week approved the sale of the company’s television unit to a group of hedge funds, while the fate of the rest of the company is still being worked out.)
Relativity Media owns a 25% share of its subsidiary sports agency. A group of investors led by Kavanaugh is trying to acquire the parent company. While Judge Michael Wiles has given a preliminary blessing to the arrangement, Kavanaugh’s new group will have to file a plan of reorganization and show how it is going to provide enough money to keep the various units of the company viable.