3Step builds business by curating a range of organizations across sports

3Step builds business by curating a range of organizations across sports 3Step launched in 2016 and built a foundation by acquiring companies in youth basketball, lacrosse and volleyball. Later acquisitions included field hockey and more.3Step Sports - Sillasderuedas

3Step launched in 2016 and built a foundation by acquiring companies in youth basketball, lacrosse and volleyball. Later acquisitions included field hockey and more.3Step Sports

As 3STEP Sports continues to grow with one headline-worthy acquisition after another, there’s an all-important question for the budding youth sports conglomerate: Is this a good fit?

 

A lot goes into the answer. David Geaslen, founder and CEO of 3Step Sports, will first have a phone call or two with leaders from the company he’s considering acquiring. He’ll then travel to visit the company and watch one of its games. If Geaslen likes what he sees — not only how the team or event operates, but also the people running it — the company will be invited to visit 3Step for a discovery meeting. If that meeting is fruitful and interest is mutual, the two sides begin talking about financials in an effort to size up what an acquisition might look like. The process has taken anywhere from six weeks to two years.

These days, Geaslen estimates only one in 10 inquiring companies makes it past the first phone call. In that way, 3Step has come a long way in a short amount of time.

The company launched in 2016 with a mission of becoming the standard of the youth sports experience and creating consistency in the industry. By late 2018, the Wilmington, Mass.-based organization had 30 employees and was generating about $10 million in annual revenue. Shortly thereafter, private equity from Fiume Capital and Juggernaut Capital helped trigger additional growth. And today, more than 700 employees make 3Step Sports a $250 million business.

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3Step Sports

Sports in which 3Step operates and key acquisitions in each:
Baseball: Select Baseball
Basketball: Zero Gravity*
Fastpitch softball: Seacoast United
Field hockey: College Connection
Football: FBU
Lacrosse: 3d Lacrosse*
Soccer: Seacoast United
Volleyball: East Coast Power*
* The director of the club/event company is now 3Step’s vice president in that sport.

The company operates in eight youth sports (see box), and is about to enter its ninth. In addition to operating the Under Armour Next program for football, volleyball and basketball, and the 3SSB Adidas-sponsored basketball circuit, 3Step has made 54 acquisitions. It has more than 70 distinct brands under its umbrella. It has executed over 2,500 events, involving more than 1,800 club teams spanning 41 states. Sponsors include ESPN, Gatorade and New Balance.

“We’ve basically created an ecosystem that is unlike anything else out there,” said Geaslen, whose résumé includes stints as Scouts Inc.’s CEO and ESPN’s vice president of high school sports and recruiting.

It wasn’t always this way. Before hopeful companies were reaching out to Geaslen about joining 3Step, he was chasing them. It began with Geaslen convincing one company each in three sports to join as an acquisition. In basketball, it was Zero Gravity; in lacrosse, it was 3d Lacrosse; in volleyball, it was East Coast Power. From there, 3Step had the necessary tools to grow within each youth sport.

“I think we’ve been able to pick that right foundational piece to intro ourselves into the sport, because they all talk,” said Walker Jones, the company’s chief marketing officer. “And they all listen, even if they’re competing with each other. And so once you make that foundational piece, that’s the one that’s going to come in and say to you, ‘You guys need to go buy these three other clubs because they get it. They understand and they’ll complement what we’re doing.’”

Added Geaslen: “We don’t need every club. We need the right clubs. I’m not going to say the best or the biggest. Just the right ones with the right people leading them.”

Geaslen said 90% of 3Step’s programming is for participants ages 8 to 14. The company has elite clubs and events, but also ones that are more developmental in nature. Companies that are absorbed by the conglomerate don’t lose their individual branding. “People know East Coast Power, West Coast Elite and Thunder LB3 Lacrosse,” Walker said. “That’s who they trust.”

For would-be acquisitions, youth sports under the 3Step umbrella become much more about the sport itself than all the intricacies of running a team or event.

“Volleyball is the reason that people that own a volleyball business are actually in it,” Geaslen said. “They want to teach volleyball, they want to coach, they’re parents, etc. So we go in and I say, ‘You keep doing what you’re doing, and I’m going to take the facility management problems away, the finance problems, the marketing, sponsor sales, website, media, insurance, registration, apparel, and we’ll take that all into a central location. I just gave you 25 hours of work back, right? What are you going to do with it? You love volleyball, you’re going to go back and put that back into the kids and the parents.’ And that’s what’s happened.”

3Step builds business by curating a range of organizations across sports 3Step launched in 2016 and built a foundation by acquiring companies in youth basketball, lacrosse and volleyball. Later acquisitions included field hockey and more.3Step Sports - Sillasderuedas

3Step Sports

Walker insists growing 3Step has never been about hitting a certain number of acquisitions or revenue dollars. “It wasn’t ever about the size, it was about the impact. How much impact can we have positively to the youth sports space?” he said. “The one cool thing about our company is all of our leadership have either played youth sports or coached youth sports or been involved in it. So we all know the value it had on us.”

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Geaslen echoed those points before raising another — his employees — in describing his pride for the impact 3Step is having.

In early April, 3Step sent 10 staffers — two from each of marketing, finance, operations and apparel, in addition to Geaslen and another executive — to Louisville, Ky., for a volleyball tournament it was operating at a convention center. It featured more than 100 courts and thousands of attendees. None of the staffers, aside from Geaslen, had ever been to a 3Step event like this one.

“I told them, ‘You’re now going to see why you market, why you pay for the floor, why you talk to the advertisers,’” Geaslen said. “‘You’re going to see it the moment we walk through the door.’”

So Geaslen walked through the door first — backward. Their reactions were everything to him.

“To see them see the impact they’re having on all these kids and their families, that’s where I get it,” Geaslen said. “That’s where I’m getting the reward.”