- Brooklyn, New York-based company Overtimes launches a seven-on-seven football league called OT7.
- Overtime said it plans to pay for expenses around the league using a portion of the $80 million it raised in April 2021 from investors including Jeff Bezos' investment firm and global entertainer Drake.
Media company Overtime is starting another amateur sports league, this time for high school football players.
The Brooklyn, New York-based company will launch a low-contact, seven-on-seven football league in June called "OT7" it announced Tuesday. The move comes more than a year after Overtime launched a high school-level basketball league. The football program will run from June 9 through June 12 in Las Vegas.
Overtime said it plans to pay for expenses around the league using a portion of the $80 million it raised in April 2021 from investors including Jeff Bezos' investment firm and global entertainer Drake. NFL quarterback Cam Newton is also an investor in OT7. Terms of Newton's investment were not made available.
Overtime co-founder Dan Porter told CNBC the company is "doubling down" on amateur leagues.
"We're focused on the biggest, most popular sports and finding our audience in those sports where we can effectively make something bigger than it had been," he said.
Overtime distributes original sports content on social media outlets, including Snapchat, Alphabet's YouTube and Meta's Facebook. The company says it has more than 50 million followers across its social media channels. Its revenue comes from two sources: indirectly aligning with brands by integrating them into online media content and making money from video ads, and through e-commerce with its apparel offerings.
CNBC reported last year that Overtime raised more than $140 million since its launch in 2016. Pitchbook estimated Overtime's valuation reached $280 million in March 2021. Porter declined to reveal specifics about the company's valuation other than to say it's less than $1 billion.
Porter cited Newton's familiarity with seven-on-seven football camps, which would help with OT7 operations. For more than 10 years, new investor Newton has coached amateur seven-on-seven teams he calls "C1N."
"It's one thing to find somebody with a big platform who can help validate what you're doing and bring that audience, but he's deep in [youth football] and cares about it passionately," said Porter.
Newton told CNBC he contemplated launching a youth football league but "we felt with the muscle that Overtime possesses, where this society is going with social media platforms, and giving these kids the exposure that they most direly want and need, I think it made the most sense."
A year ago, the company started its Overtime Elite, or OTE, basketball league, which is based in Atlanta. The league allows younger basketball players to bypass traditional high school and collegiate levels while building their brand before becoming eligible for the NBA's draft.
The league is still in its first year of operation. NBA scouts who spoke with CNBC about OTE said its too early to speculate the impact it could have on the recruiting landscape.
Still, Overtime is growing its content deals around OTE.
In January, Meta struck a deal with OTE to create virtual reality dunk shows for its Oculus devices. Terms of that deal weren't publicly disclosed and Porter didn't discuss specifics around OTE's revenue. But the bet is that Overtime can eventually license the content to a bigger media company or streaming platform seeking a Generation Z audience.
"We want to build as much value as possible," said Porter. He added Overtime's social media audience is "not a massive consumer of live linear [media consumption], but we think they will get there."
Last year, Overtime built a 103,000-square-foot complex in Atlanta's Atlantic Station section. The campus is the residence for OTE participants and league staff. OTE says it provides financial literacy, life training and traditional education categories. OTE pays players a minimum of $100,000 in compensation, and it pledges to pay an additional $100,000 for college expenses should players not pursue the professional route.
OT7 football players, however, will not be paid for playing. Overtime said the move protects college eligibility but added it plans to pay for participation expenses such as hotel rooms and meals, but excludes equipment costs.
OT7 will feature up to 24 teams playing eight games each and a playoff round to determine a champion. The games will be played on 40-yard line segments of a regulated 100-yard NFL field, run 20 minutes each with no pads, and tackling is restricted. OT7 will allow one-hand touch for stoppage of play.
Overtime said the league would help develop players' passing and route-running skills. Quarterbacks will have six seconds to throw passes. Overtime estimates 500 to 700 athletes could attend the league.
"There has been this untapped market in seven-on-seven for years," Newton said. "We've seen kids receive scholarship offers because of their seven-in-seven film." He said OT7 would provide "kids the exposure from the visual content that they need. Whether you have five stars or no stars, we want to give you that platform that highlights your skill set."
Newton, 32, has made $133 million in his 11-year NFL career, according to Spotrac, a website that tracks sports contracts. Forbes also estimates Newton has made $5 million in annual endorsements from companies including Under Armor. Newton had an agreement with headphone company Beats, which is owned by Apple, but that deal expired in January 2020, the company told CNBC.
Newton said his involvement in OT7 is perhaps his most significant investment due to his "double-dipping." Newton will help run OT7 while continuing to coach his C1N teams that will compete in the league. It's unclear if the NFL quarterback profits from his teams through Overtime's business model.
"If I can't relate to it personally, I don't do it," Newton, a three-time Pro Bowler and former NFL MVP who led the Carolina Panthers to the Super Bowl in 2016, said of his investment strategy. "I'm a person who did right with their money and continuing to do right by my money."
Whether he plays again the NFL is up in the air. He's a free agent for the second time in two years. Asked about his future, Newton didn't mention retirement but didn't rule it out either.
"I'm in a position right now in life where a lot of connections have been formed," Newton said. "I have no doubt in my mind – could I still play this game at a high level? Absolutely. Do I need this game to live at a high level? Absolutely not."
Asked what he was looking for in a potential next team, he said: "I just want to win. That competitive drive never goes away."