Sports’ most active PE owners revealed

Buyout firms CVC Capital Partners and Silver Lake are among the biggest investors by disclosed deal value, alongside sports specialists Arctos Sports Partners and Bruin Capital.

Sports assets have become hot property for private equity during the pandemic.

Dallas-headquartered Arctos Sports Partners is close to raising $2.9 billion for what would be the largest debut private equity fund in history, Private Equity International reported on Monday. The close follows a busy quarter for the firm, which last month added the Sacramento Kings to its National Basketball Association investment portfolio, in a deal reportedly valuing the franchise at $1.8 billion.

The sports sector has also attracted some of the industry’s biggest names. In August, CVC Capital Partners reportedly agreed a €2.7 billion deal for an approximately 10 percent stake in Spain’s top-flight football league, La Liga. Under the deal, CVC would accrue some of the revenue from the league’s commercial rights.

Ares Management said in June that it had splurged more than $1 billion into the sports, media and entertainment sectors over the preceding six months. Its most notable purchase was a roughly 34 percent stake in the majority shareholder of reigning Spanish football champions Atlético Madrid for an undisclosed sum.

In recent years, private equity firms have become a growing force within sports, with lucrative deals that comprise federations, leagues, teams, players, media rights and sponsorships, data providers and sports tech companies, among others, as PEI explored in last November’s Deep Dive. The pandemic has thrown up more buying opportunities for PE firms, as the sports industry tries to find new areas of growth and sustainable profit.

CVC has become a familiar presence in the sector, while fellow buyout shops Silver Lake and KKR have also been busy, alongside sports-dedicated investment firms RedBird Capital Partners and Blue Owl Capital‘s Dyal HomeCourt Partners.

“It’s not just a spreadsheet to us – we understand through experience that you must embrace the partnership between the fans and their teams, as well as between athletes and their teams and leagues,” RedBird founder and managing partner Gerry Cardinale told PEI. “If you do this, then you can be a positive catalyst for enhancing the value proposition for all stakeholders – teams, leagues, athletes and the fans themselves.”