In a stunning collapse, one of the nation’s largest youth sports enterprises, Boston-based Legacy Global Sports, has spiraled into bankruptcy amid a federal criminal investigation, allegations of fraud and mismanagement, and the devastating impact of COVID-19.
The company’s demise has left thousands of parents, coaches, staffers, vendors, and investors from Boston to points around the world with little hope of recovering the combined $30 million they are owed.
At its height, Legacy was taking in more than $1 million a week as one of the country’s leading providers of elite youth soccer, hockey, and lacrosse programs, and by managing travel services to tournaments and other events the company operated across North America and Europe.
But with one former employee convicted of obstructing justice and others under investigation for possible visa fraud and other federal offenses, all that’s left of Legacy Global Sports and its affiliates is a trail of pain and promises not kept. Legacy’s past and present executives, in court documents or statements to the Globe, have denied any wrongdoing
“The whole thing is awful,” said Jason Murphy, a Legacy customer in New Hampshire who paid $6,300 for a trip with his 14-year-old son to Slovakia that never happened. Murphy’s son was selected to compete in a Legacy-operated elite hockey tournament in the capital of Bratislava on the Danube River.
“I guess all you can do is live and learn and chalk it up as a bad memory.”
Murphy is among a multitude of creditors Legacy has left empty-handed. In Greater Boston, they include the Massachusetts Youth Soccer Association ($68,572), the New England Futbol Club ($33,795), the Junior Bruins hockey program ($28,576), and hundreds of other private entities, municipalities, and families. Much of the debt to private entities and municipalities involves athletic-facility rentals.
Legacy’s sudden insolvency left more than 400 people jobless, more than 130 in Massachusetts alone.
Yet for all the damage the company wrought, Legacy’s loss has barely nicked the $19 billion youth sports industry. Between May, when creditors forced the company into involuntary bankruptcy, and October, when Legacy liquidated much of its assets, rival organizations absorbed most of its 200,000 clients: parents who spend thousands of dollars a year on pay-to-play programs for their children to maximize their athletic potential.
‘The whole thing is awful. I guess all you can do is live and learn and chalk it up as a bad memory.’
Jason Murphy, a Legacy customer in New Hampshire who paid $6,300 for a trip that never happened
Where there is money to harvest in youth sports, there are people poised to reap it.
“I feel bad for the company’s employees and for everyone who paid for their kids to play and will never see their money again,” said David Geaslen, founder of Wilmington-based 3Step Sports, the nation’s largest youth sports club and event operator. “But every single kid who played for a Legacy program is going to be playing for somebody else.”
‘A nightmare case study’
Propelled by partnerships with Adidas and German soccer club Bayern Munich, Legacy’s founders once envisioned the company expanding at a rapid clip internationally. Now, critics say, it’s the skeleton of a business that chose profits over children.
“It’s all about the pay-to-play commercialization of youth sports,” said Chris Kessell, who operates a low-cost soccer program for inner-city children in Charleston, W.Va., and competed with a Legacy affiliate that ran a pricier operation. “Some people are making a lot of money, while the vast majority of kids are getting left behind.”
Legacy and its affiliates charged parents for children’s tryouts, registrations, uniforms, camps, clinics, showcases, tournaments, tours, and travel expenses, often to faraway locales. The faster the cash flowed, the more attractive the business became to private equity firms; one of them, New-York based Jefferson River Capital, gained a controlling stake of Legacy in 2018, not long before the sports enterprise entered its final, tumultuous phase.
Some perspective on Legacy’s financial calamity may be gleaned from a book by Stephen Griffin, the CEO who presided during most of the crash: “Front Row Seat: Greed and Corruption in a Youth Sports Company.”
Griffin, of Providence, describes the book as fiction, although he recounts experiences that appear strikingly similar to actual events, with the names of people and places changed.
In fact, a Legacy subsidiary alleges in a civil complaint that Joe Bradley, who ran the company’s soccer business, hid from senior executives and investors a pattern of dubious visa practices that are under investigation by the Department of Homeland Security and Department of Justice.
Jefferson River also alleges in a civil complaint that John St. Pierre, who preceded Griffin as Legacy’s CEO, engaged in “fraudulent misconduct” by failing to disclose how unstable the company was before Jefferson River bought in.
Bradley and St. Pierre have denied any wrongdoing.
“If you identify with the personal attributes of certain questionable individuals in this book, I would encourage you to reassess your code of ethics,” Griffin wrote in a foreword.
In turn, Bradley and St. Pierre have filed lawsuits and counterclaims, alleging Griffin, Legacy, or its subsidiaries have defamed them and are responsible for the company’s downfall.
Griffin joined Legacy in 2017 as executive vice president of strategy, mergers, and acquisitions, at St. Pierre’s invitation. Within a year, St. Pierre alleges in court documents, Griffin orchestrated his wrongful firing, assumed his position as CEO, and began contributing with Jefferson River to the company’s demise.
St. Pierre and two fellow entrepreneurs founded Legacy in 2003.
“Legacy became a nightmare case study for entrepreneurs when they bring the wrong people into their business,” St. Pierre, of North Hampton, N.H., said in a statement to the Globe.
Jefferson River’s managers declined to comment.
In 2016, Legacy under St. Pierre finalized its largest — and most fateful — acquisition, agreeing to pay $14.2 million for 80 percent of Waltham-based Global Premier Soccer, one of the country’s biggest youth soccer businesses. The transaction fueled Legacy’s growth but ultimately factored in its failure when Bradley, one of Global Premier’s founders, came under law enforcement scrutiny.
Bradley, who grew up in Northern Ireland during the Troubles, went on to play soccer for Harvard and captained the Crimson’s 1993 team. Legacy retained him to run the business, and Global Premier was generating nearly half Legacy’s revenue until federal investigators came calling.
On Oct. 9, 2019, agents swarmed Global Premier’s headquarters, seizing records and additional evidence. The company’s business model called in part for recruiting foreign soccer coaches for its clubs across the United States, and a Legacy subsidiary alleges in a civil claim that Bradley personally profited from running “an illegal visa scheme” by “recruiting foreign youth soccer coaches, while pretending they would serve as professional scouts for which P-1 visas could be obtained.”
P-1 visas are intended to cover professional athletes, entertainers, and their support staff.
Bradley, of Newton, has identified himself as a target of the federal investigation. He has said in court documents that Global Premier’s visa practices were legal and approved by immigration attorneys.
In a statement to the Globe, Bradley said, “While it was sad how GPS ended, I believe everybody involved with the organization can be proud of its contribution to youth soccer. Over the last two decades it has offered high-quality soccer training to thousands of boys and girls, helping scores of players reach their college soccer goals.”
Bradley declined to comment further about the investigation.
At least one other former Global Premier executive has been informed he is a target of the inquiry, according to two sources familiar with the case.
In May, one of Bradley’s former associates, Gavin MacPhee, a Scot who had served as Global Premier’s marketing director, pleaded guilty in US District Court in Boston to obstructing justice by deleting the e-mail account of another company official during the investigation. MacPhee awaits sentencing and faces up to 20 years in prison, though he could receive leniency if he cooperates with prosecutors.
Griffin said Legacy itself has cooperated with federal prosecutors and conducted its own “significant and exhaustive investigation.”
Bradley was fired by Legacy, wrongfully, he says. He has since joined his brother, Peter Bradley, and Global Premier’s other initial investors in suing Legacy, Jefferson River, Griffin, and others for more than $4 million they allege they are owed.
Before the collapse, Legacy was operating in more than 30 states and numerous countries. The company controlled its own travel subsidiary, managing trips to elite youth sports events, some to Europe’s most popular tourist destinations. Legacy also owned an apparel manufacturing company in the Dominican Republic. And it partnered in managing a youth sports village associated with the Pro Football Hall of Fame in Ohio.
But the formula proved unsustainable. Jefferson River — the personal wealth office of billionaire businessman Tony James — mainly blames St. Pierre, alleging in a lawsuit that his “fraudulent misconduct” as CEO caused Jefferson River to overpay for its share of a troubled enterprise.
“The company was not what it was purported to be in the first place,” Griffin said. “We did our best to clean it up and turn it around.”
To the contrary, St. Pierre alleges, Griffin and Jefferson River overspent and mismanaged a successful enterprise into ruin.
“The unfortunate way this company was handled leading up to the COVID pandemic — including the use of money and power to suppress minority founders and shareholders; squandering millions of dollars on unnecessary overhead, high executive salaries, and outrageous attorney’s fees on frivolous litigation claims; creating a culture of harassment and intimidation; and ultimately not refunding customers for canceled events — is very disturbing,” St. Pierre said in his statement to the Globe.
Chuck Huggins, who served as Legacy’s chief financial officer under St. Pierre, was asked in a deposition if he knew why Griffin and others at Legacy had accused St. Pierre of fraudulent conduct. Huggins replied, “The firing of John was completely mishandled. It put Steve in as CEO in a situation that he probably didn’t understand and maybe didn’t have the capabilities to manage ... The performance has suffered and they’re blaming it all on John, which I disagree with.”
Opting for liquidation
Phil Silveira, Legacy’s last chief financial officer, defended Griffin and Legacy’s business practices. He joined the company after St. Pierre, Bradley, and Huggins had been fired.
“I understand the resentment some of those folks may have,” Silveira said. “It was their company. They started it, and they were terminated for a variety of reasons. But from a corporate perspective and for the size of the company we were, I didn’t see anything out of line.”
In Silveira’s view, COVID-19 ultimately killed the company. Last-ditch spending cuts failed. So did additional infusions of private equity funds.
“We had no cash coming in for months and months,” Silveira said. “We tried to hold onto any capital we had to see how long the situation might last, thinking we could come out on the other side of it.”
Legacy’s board, believing it might save the business through a Chapter 11 bankruptcy reorganization, rejected offers from potential buyers rather than accept “fire sale” prices, according to Silveira. The board finally opted for a Chapter 7 liquidation.
In Griffin’s last months with Legacy, he said, he spent considerable time addressing internal problems created by St. Pierre, Bradley, and their former associates, and making personnel changes, largely because of the criminal investigation.
“Couple all of that with the COVID lockdown’s impact on our ability to manage live events and operate youth club sports, and the company ultimately ended up in a bankruptcy filing,” Griffin said.
Claims and counterclaims abound, and it will fall to the courts to resolve the disputes. But no one seems to dispute that a venture created to serve children and families ended up failing them.
Bob Hohler can be reached at email@example.com.