Kobe Bryant's $400 Million Investment Win

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Hey Friends,

The sports drink market is heating up.

In 2018, Coca-Cola acquired a 15% stake in BodyArmor for $300 million at a $2 billion valuation. The brand was doing roughly $250 million in annual sales at the time—less than 5% of the total market—but had the ambition to take on industry leader Gatorade.

Fast forward three years and the market looks completely different.

Sure, Gatorade is still the industry leader, owning a massive 64% of the $8.4 billion sports drink market. Still, BodyArmor has now surpassed Powerade, becoming the second-largest sports drink maker with a whopping $1.4 billion in sales.

BodyArmor Annual Sales

• 2018: $250 million

• 2021 (E): $1.4 billion

That’s a 77.58% compounded annual growth rate — insane.

So, Coca-Cola returned to the well, spending an additional $5.6 billion yesterday to acquire the remaining equity stake that they didn’t already own and officially assuming complete control of the upstart brand.

The interesting part? Kobe Bryant acquired 10% of the company for $6 million in 2014, serving as a board member, creative director, and the brand’s 4th-largest shareholder until his passing in 2020.

After dilution, his wife and children will take home $400 million — that’s a 6,566% gain and more money than Kobe made during his entire 20-year NBA career.

That’s amazing, of course, but it’s just part of the story.

Mike Repole has been an entrepreneur his entire life.

Growing up in Queens, New York, Repole had a passion for two things — sports & business. He had magazine subscriptions to both Sports Illustrated and Money magazine, reading them religiously.

But after realizing he wasn’t going to be a professional athlete, Repole decided to pursue his passion for business and enrolled at St. John’s University. First, he tried to get a degree in Finance but “wasn’t very good at it,” so he eventually switched to Sports Management and graduated with a “stellar 2.2-grade point average” in five years.

Repole spent the next seven to eight years working various jobs throughout the beverage industry. He was working his way up, from a beverage salesman at Mistic Beverages to a Vice President at Crystal Geyser, but he found himself wanting more.

The result? Mike Repole and a partner teamed up to launch Energy Brands in 1999, more commonly known as Glaceau.

The idea behind Energy Brands was simple — to create enhanced water. The popular “Smartwater” was their first product, but just a year after that, Repole and his team introduced “Vitamin Water,” and sales took off just a year after that.

Energy Brands Sales

• 1998: $0

• 2007: $1 billion

In an attempt to catch up to Pepsi in the non-carbonated drink market, Coca-Cola came calling and ended up purchasing the company for $4.1 billion.

Repole and his partner made millions of dollars on the deal, of course, but the best part is that their employees also did.

After the $4.1 billion sale to Coca-Cola, Mike Repole joined Pirates Booty as chairman. He became the largest individual shareholder, and within five years, he had worked his magic again.

The company had grown 400% and was acquired for $200 million. Still, even with two successful exits under his belt, Repole couldn’t sit on the sidelines for long.

Less than 24 months later, Mike Repole and Lance Collins founded BodyArmor — a healthier alternative to Gatorade and built on the idea that people were “tired of the same old sports drink.”

Repole was correct, again. The drink was low in sodium, packed with electrolytes, coconut water, and antioxidants, and athletes flocked to it.

The BodyArmor team aggressively started signing endorsement deals and taking investments from professional athletes. If it was good enough for the best athletes in the world, isn’t it good enough for me? That thought process worked, and sales exploded.

BodyArmor now owns nearly 20% of the U.S. sports drink market and has seen its valuation increase from $25 million in 2013 to $8 billion today.

US Sports Drink Market Ownership

• Gatorade: 64%

• BodyArmor: 18%

• Powerade: 13%

Kobe Bryant turning $6 million into $400 million is the headline story. Still, the brand’s earliest investors, like Mike Trout, Andrew Luck, Buster Posey, James Harden, and Rob Gronkowski, will likely see $10-million-plus payouts from the acquisition also.

In addition, essentially every BodyArmor endorsement deal throughout the years included some equity component. So, several athletes most likely profited from the sale also, albeit on a much smaller scale.

Athletes That Owned BodyArmor Equity

• Naomi Osaka

• Baker Mayfield

• Klay Thompson

• Skylar Diggins

• Sydney Leroux

• Chrisitan McCaffrey

• Trae Young

• Sabrina Ionescu

• CeeDee Lamb

• Kemba Walker

• Drew Lock

• Ronald Acuna Jr.

Now, it’ll be interesting to see how Coca-Cola attacks the market. My guess is that this is just the beginning of the battle between Gatorade & BodyArmor.

I hope everyone has a great day, and we’ll talk tomorrow.

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Huddle Up is a daily letter that breaks down the business and money behind sports.

Join more than 49,000 professional athletes, business executives, and casual sports fans that receive it directly in their inbox each morning — it’s free.

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