Is the SPAC back? Seattle business leaders Ted and Chris Ackerley are betting on it.
The Ackerley brothers are part of a new special purpose acquisition company, or SPAC, called ESH Acquisition Corp. that is targeting an enterprise in the entertainment, sports, and hospitality sectors. Last month it closed an IPO, raising $115 million.
Also known as blank check companies, SPACs re-emerged in a big way during the pandemic as capital flowed to newly formed entities and entrepreneurs used the financial instruments to more quickly enter the public markets. SPACs form with the intent of acquiring a private company in order to take it public.
But the performance of post-merger SPACs steadily dropped throughout 2022 amid the larger market slowdown and a record number of deals were spiked. A Tiger Woods-led SPAC dropped plans for a $150 million SPAC earlier this year.
There were 613 SPAC deals in 2021; just 21 have been completed this year, according to SPAC Insider. Only four blank-check companies went public in the second quarter, the lowest level in four years, S&P Global reported.
Ted Ackerley admits that the narrative around SPACs “hasn’t been all that positive.” But he’s confident that the timing is right — particularly for companies looking for cash as investors are more conservative with rising interest rates.
“We’ve got capital we need to put to work,” said Ted Ackerley.
The Ackerleys were primarily drawn to the SPAC because of a team that includes industry veterans who have experience with this particular fundraising vehicle.
“It’s less about the instrument, and more about the opportunity and the people behind it — and the belief that we can really take a company and grow it significantly,” said Chris Ackerley.
The leadership team includes:
- Al Weiss, former president of Walt Disney World
- James Francis, former CEO of Chesapeake Lodging Trust
- Jonathan Morris, investment partner at TLG
- Thomas Wolber, former COO of Disney Cruise Line
- Jonathan Gordon, co-founder of Ruttenberg Gordon Investments
- Christina Francis, president of Magic Johnson Enterprises
The SPAC is taking a close look at consumer-facing companies developing digital assets. Online betting, gaming, and fandom are also areas of interest.
The Ackerley brothers certainly have guidance to provide based on their experience as part-owners of Seattle’s NHL franchise, the Seattle Kraken, which debuted two years ago. They are also raising capital for a European-based soccer club.
As it relates to merging tech and innovation with sports and entertainment, Chris Ackerley said the focus has to be on the customer and creating a constant feedback loop.
“It’s one thing to say you have a technologically advanced arena,” said Chris, alluding to the new Climate Pledge Arena in Seattle. “The key is to be able to say it creates a better experience for our customer.”
Sports runs deep in the Ackerley family. Ted and Chris are the sons of the late Barry Ackerley, a Seattle businessman and founder of The Ackerley Group media company, which owned the NBA’s Seattle Supersonics for 18 years. Barry and Ginger Ackerley, his wife, founded the WNBA’s Seattle Storm in 2000.
The Ackerley Group sold to Clear Channel Communications in 2002 for more than $800 million. Ackerley Partners, LLC formed from that deal. The firm, now led by Ted and Chris, has backed various Seattle tech startups in addition to other investments.
The brothers say they’re in awe of how technology continues to evolve at a rapid pace.
“As an investor, you’ve got to be a lot more shrewd and careful and thoughtful in your decision-making process,” said Ted Ackerley. “Things are coming and going so much quicker. You don’t have that more elongated period of time to figure out the market, identify where the opportunities are, where the holes are. You’ve got to be pretty spot on, pretty quick.”
The brothers continue to invest in their longtime hometown of Seattle. They hope to see a more collaborative approach between the public and private sectors, along with an environment that encourages entrepreneurship.
“We’re bullish on it, even with its challenges,” Ted said of the city.
