ZRG Acquires Turnkey Search

A steady wave of mergers, acquisitions, and consolidations has swept across the executive search sector for more than a year now. This latest acquisition is all about synergy, strategic growth and creating competitive advantage. Let’s go inside the latest deal.

January 25, 2021 – ZRG has made a major move into the sports, entertainment & media sectors by acquiring Turnkey Search. Financial terms of the transaction were not disclosed. Renamed TurnkeyZRG, all Turnkey staff and assets merge into ZRG and the firm will continue to be led by Len Perna, the founder, chairman, and CEO of Turnkey.  Turnkey will now adopt ZRG’s tech-enabled, data-driven approach to the search process which it says will give the newly merged firm a competitive edge in the hunt for sports, media, and entertainment talent. Larry Hartmann, CEO of ZRG, called the deal a “blockbuster acquisition.”

Hunt Scanlon Ventures facilitated the introduction and transaction between ZRG and Turnkey, both perennial leaders in Hunt Scanlon’s rankings of executive search firms. “Len Perna built Turnkey into the most formidable sports recruiting brand in the nation,” said Scott A. Scanlon, CEO of Hunt Scanlon Media. “This combination allows ZRG to deliver its ‘Moneyball’ approach to sports and entertainment, using a proprietary Z Score ‘scorecard’ to leverage data and analytics into better hiring decisions,” he said. “Unlocking hidden value in talent and skills makes this the ultimate Moneyball team. It is a game-changer in sports & entertainment recruiting,” Mr. Scanlon said.

“We landed the best sports executive search firm, and the No. 1 talent recruiter in Len Perna,” said Mr. Hartmann. “Len started Turnkey 25 years ago, and consistently won gold-standard clients from billion-dollar competitors. Along the way, Turnkey cemented a reputation for integrity, accountability, and prioritizing diversity long before others.”

Related: New State Capital Partners Takes Equity Stake in Klein Hersh

“Selling to ZRG is about synergy,” Mr. Perna said. “Synergy going both ways. ZRG has already brought us business from their private equity practice. PE has come into sports in a big way. That helps us. ZRG’s higher ed relationships will help us in college sports. Going the other way, Turnkey has many sports clients that own other businesses,” he said. “So, they need recruiting specialists in PE, tech, life sciences, retail/consumer, and a host of other verticals and ZRG brings that.” Mr. Perna said that TurnkeyZRG will remain highly specialized, “but will now be able to leverage more reach, and more scale to enjoy reciprocal synergies.”

Related: Arthur J. Gallagher & Co. Acquires Optimum Talent

“I did this deal to win championships,” said Mr. Perna. “The way I look at it, Turnkey is always a playoff team – a small-market, perennial playoff team. We’ve been under-resourced, up against the Yankees and yet, somehow, we still win our share. The ZRG deal gives us the tech tools, analytics, reach and resources to be the undisputed champ of the space. I shared that goal with CEO Larry Hartmann and he instantly got it.”

Hunt Scanlon Media Launches M&A Advisory Service for Recruiters
These have been sobering days for executive recruiting firms around the globe. Most of them, regardless of size, location, or specialization were caught flat-footed by one of the most sweeping economic crises to ever hit the sector this past year. As a result, the nation’s top search consultants have been resetting expectations and, in the process, setting a new course for 2021.

Professional services firms – and executive recruiting outfits in particular – have a long history of finding their way through tough times. The COVID-19 pandemic is no exception. Many search firms have used this time to dust off their own continuity and succession plans, or to reconsider that merger or acquisition which was something of a nuisance when times were flush. Others have taken a hard look at their capitalization strategies. This crisis, like no other, has driven many of the most well-known and respected brands in the recruiting business to reassess everything about their businesses, top to bottom.

Behind the scenes, this has been an active period for executive recruitment firms. To meet their advisory needs, Hunt Scanlon Media last year launched a new set of solutions to assist search firms and talent solutions providers seeking mergers, acquisitions, or funding connections. Founders Scott A. Scanlon and Christopher W. Hunt sit down to discuss Hunt Scanlon Ventures and the state of the executive search industry.

In 2020, Turnkey Search handled some 56 searches in the sports, entertainment, and media space – a record for the firm in one year. Among them: searches for NFL clubs, including the Atlanta Falcons, Dolphins, Panthers, Rams, Texans, and 49ers; searches for NBA clubs, including the Bulls, Magic, Pistons and Trailblazers; searches for MLS clubs, including the Atlanta United, Cincinnati FC and three new MLS teams; searches for NHL clubs, including the Flyers, Penguins, and expansion Seattle Kraken; and four executive placements at the USA Olympic program (USOPC).

Related: Caldwell Acquires IQTalent Partners

Indispensable, Best-in-Class Recruiters

“Len Perna and his team at Turnkey have been an invaluable asset for the Penguins in building our executive team,” said David Morehouse, president and CEO of the Pittsburgh Penguins. “That team has been able to provide the necessary revenue – by building our fan base and creating partnerships with the corporate community – to win three Stanley Cups and build our brand into one the top brands in professional sports.”

Turnkey Search Recruits CFO for the Pittsburgh Penguins
Turnkey Search recruited former NBCUniversal executive Jenny Darling as the new chief financial officer for the Pittsburgh Penguins. She becomes the only female CFO in the NHL. “CFO roles like this are rare,” said Turnkey Search founder and chairman Len Perna. “There isn’t much turnover in sports. These roles are unlike those at larger enterprises or public companies.” Ms. Darling was previously with NBCUniversal for more than seven years, most recently serving as vice president of finance for NBCUniversal. “The Pittsburgh Penguins are an iconic, amazing organization,” said Mr. Perna. “Mario Lemieux, the owner, and David Morehouse, the CEO, are not only great executives, but just fantastic people.”

“Turnkey helped us on several important searches at the Hawks,” said Grant Hill, vice chairman and part owner of the NBA Atlanta Hawks. “On the basketball general manager search, I worked closely with them and they did a terrific job of understanding our organization and ownership, quickly assessing the NBA landscape for talent in basketball operations, and then ran a well-organized, well-researched and appropriately-paced search process to help us land Travis Schlenk from the Golden State Warriors.”

Related: Turnkey Search Places Commissioner for Major League Rugby

“Len and his team helped me turnaround the Miami Dolphins’ business by assembling the best front office in sports,” said Steve Ross, owner of the Miami Dolphins, chairman of the Related Companies, and founder of the Ross Initiative in Sports for Equality (RISE). “At Michigan, my other true love, Turnkey brought us Warde Manual and Juwan Howard. And at RISE, from the start, Turnkey has been 100% committed to our mission of using sports to advance racial equality.”

“I have known and worked with Chad Chatlos, Katy Young Staudt, and Gene DeFilippo for years, and have tremendous respect for how they work with their clients and always conduct themselves with high integrity,” said Chris Del Conte, director of athletics at the University of Texas. “They are the best in the business.”

Turnkey Search Recruits Head Football Coach for Texas Longhorns
Turnkey Search recently assisted the University of Texas at Austin in the recruitment of Steve Sarkisian, currently offensive coordinator for the Alabama Crimson Tide, as head coach of the Longhorn football team. “We are excited to have Steve Sarkisian join us and lead the next chapter of our football program,” said Kevin Eltife, chairman of the UT system board of regents. “University of Texas football has a long and proud history of competing at the highest levels within our conference and nationally, and he brings with him the coaching caliber and championship experience needed to restore this kind of excellence to our program.” 

Don Garber, commissioner of MLS since 1999, said Turnkey has been instrumental in helping his MLS clubs find the right talent: “Turnkey has been a key MLS partner for as long as I’ve been Commissioner,” said Mr. Garber. “In 2020 alone, Turnkey helped Atlanta, Charlotte, Cincinnati, St. Louis and other clubs build their talent.”

Aligned on Diversity and Inclusion

“From day one Turnkey was founded as a purpose-driven company,” said Mr. Perna. “We produced “Bridging the Gap” DEI programming with Ken Shropshire from 1999 to 2005. We helped Steve Ross standup RISE, the Ross Initiative in Sports for Equality. In 2020 we exceeded 51 percent diverse placements and hope to exceed 50 percent this year with ZRG’s help. It’s in our DNA and ZRG’s DNA and so we’re aligned on this core value.”

CarrSports Announces Transfer of Ownership
CarrSports Consulting, LLC has transferred ownership of the firm from founder and former president Bill Carr to managing partners Mike Thomas and Jeff Hathaway. Going forward, CarrSports will continue to focus on executive searches for athletic directors, head coaches, conference commissioners, and executive staff roles covering business planning and fiscal management, revenue generation, fundraising, and strategic planning, among others. 

Diversity matters everywhere, of course, but especially in the sports & entertainment field. “The way you succeed in the sports & entertainment business is by fully understanding your customers and your product,” Mr. Perna said. “The majority of our customers are diverse. The majority of our athletes and entertainers are diverse. It’s beyond self-evident. Our sports & entertainment clients are playing catchup but they are definitely determined to attract more diverse talent to the business. And TurnkeyZRG will aggressively make this happen and lead the way.”

Related: Turnkey Search Recruits Chief DE&I Officer for the Orlando Magic; Fills ACC Commissioner Role

Challenging Year for Sports

Last year was one of the most challenging years in the history of the sports business – at least financially. The lost revenue for leagues, teams, venues, sponsors, media companies, athletes, entertainers, agencies – and executive search firms – was staggering. “And yet, as an industry, 2020 has been our finest hour,” said Mr. Perna. “Look at the Dolphins feeding their community 1,000 meals a day at Hard Rock Stadium. Look at the venues rallying to provide testing and vaccination sites. Look at the athletes sacrificing their health and their family time to provide entertainment for a nation stuck at home. I’ve never been so proud to be serving the sports sector and finding just the right people who fit into this culture.”

Related: Help Wanted: President Business Operations, Detroit Pistons

This year remains uncertain for many sports – at both the college and national team levels. “2021 is unlikely to see full stadiums and arenas until the fall,” Mr. Perna said. “But I also know that our clients are already planning the comeback. Comebacks are ingrained in sports DNA. And our firm is ready for the comeback, whenever it is.” TurnkeyZRG has already made four significant hires for clients in the last 30 days.

Turnkey is not alone in the hunt for qualified leaders across the sports, media, and entertainment spectrum. Competition for talent is expected to heat up as the pandemic subsides later this year and a slew of executive recruiters stand at the ready to help recruit talent efficiently and with speed, using deep networks and inside information on who’s who, who’s where, and who’s ready to move.

Two recruiters stand out: Joe Becher and Asher Simons, both former sports recruiters with Odgers Berndtson and now with Creative Sports, a unit of Creative Artists Agency (CAA). CAA has spent years positioning itself at the nexus of talent, content, brands, technology, sports and live events and the agency represents more than 1,000 top athletes across every sport. Executive recruiting is seen as one of the firm’s expanding platforms.

One top sports search CAA took on last fall was an assignment to find a chief football officer for the XFL – a senior executive to oversee football operations under the new ownership of Dwayne “The Rock” Johnson, Dany Garcia, and RedBird Capital Partners. CAA Sports and the firm’s executive recruiting team led by Mr. Becher is spearheading the search, according to Sports Business Journal. The position has been described as crucial to the XFL and much like a Commissioner role, but with a tighter portfolio and less autonomy. The new XFL owners intend to start play again next year which will give the incoming chief a full year to reconstitute teams, change up coaching staffs and, presumably, hand CAA Sports more search business from across the league.

Turnkey Search Adds Veteran Sports Recruiters
Last month, Turnkey Search added Chad Chatlos and Katy Young Staudt to its recruitment team. The pair joined the firm from Ventura Partners. “Chad and Katy are championship caliber sports recruiters,” said Turnkey CEO Len Perna. “With them onboard, we’ll be even better at helping our clients win, win, win.” Mr. Chatlos will lead the firm’s work in college sports, including recruiting football and basketball coaches. In the last month, he has assisted on new head football coaching hires at the University of Arizona, the University of South Carolina, the University of Texas, and the Atlanta Falcons. In the past three years, Mr. Chatlos and Ms. Young Staudt have placed more than 50 head coaches and other coaches in college and professional sports.

Raising the Visibility

“For all the acquisitions and key hires that Larry Hartmann and ZRG have been involved in on the way to becoming one of the fastest growing bulge bracket executive search firms in the U.S., the Turnkey deal is the one most likely to raise its visibility – and for that reason the Turnkey acquisition might be one of Mr. Hartmann’s best moves yet,” said Mr. Scanlon. “After all, sports hires tend to draw more attention than the recruitment of typical business executives, no matter how talented and respected they might be. In our media-dominated culture, this aspect of the deal we arranged cannot be overstated.”

Related: Teneo Acquires Ridgeway Partners

Last year, ZRG posted $63.4 million in North America revenue alone, a 73 percent rise from the prior year, according to the 2020 Hunt Scanlon Top 50 Recruiters rankings report. Overall, ZRG ranked as the 11th largest Americas search firm. Although growth was slightly up in 2020, the pandemic year, Mr. Hartmann said his firm could return to growth rates as high as 50 percent to 60 percent in 2021. ZRG, he believes, could hit the $100 million mark this year, a key milestone along its strategic growth plan.

In the last year, the firm was able to make a series of savvy hires, including Lisa Peacock-Edwards from Wilton & Bain, Nat Sutton from Buffkin/Baker and Lisa Hooker from Odgers Berndtson, which collectively could add some $15 million to the firm’s revenue stream. Additionally, ZRG has made inroads into the interim hiring sector, an area that has seen accelerating growth due to the pandemic crisis, acquiring London-based search firm Holker Watkin in 2019. That business is focused on supporting client needs for senior-level strategy professionals on a retained and interim project basis. With the addition a few months ago of Mark Viner, from Steven Douglas, ZRG is now focused on organically building out its interim business line which could add millions in revenues in the coming years.

Related: USOPC Taps Turnkey Search for Multiple Searches

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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