The sporting world has increasingly drawn private equity buyers into its realm. The latest firm to bet on the sector is New York- and London-based TowerBrook Capital Partners, which is backing Dave Checketts’ Sports Capital Partners in the acquisition of the National Hockey League’s St. Louis Blues. The deal is valued at around $150 million (€125 million).
While Bain’s offer never really got off the ground, other private equity firms have been active in the sector in the past. The Ontario Teachers’ Pension Plan has been an investor in the Toronto Maple Leafs since 1994 and bolstered its position in a 2003 recap, while Chartwell Investments, two years ago, lost a heated bidding war to buy the Buffalo Sabres out of bankruptcy. Thomas Hicks, one of the founders of Hicks Muse Tate & Furst (since renamed HM Capital), has also owned the Dallas Stars since 1995.
Collin Vataha, a senior associate at sports-focused investment bank Game Plan LLC, told PEO that he has seen a significant up-tick in the number of private equity firms interested in sports assets in general.
Game Plan served as an advisor to the sellers in the St. Louis Blues deal, and according to Vataha, a number of financial sponsors made inquiries into buying the team.
Overall, he says, “We continue to see more and more private equity funds getting involved in deals like this… Franchise values tend to appreciate at a pretty high rate, and buyers see this as the time to get into the NHL, as values can only go up from here.”
The St. Louis Blues currently sit at the bottom of the Western Division, and in the season preceding the strike, the Blues tallied roughly $40 million in losses.
Vataha could not comment on the bidders in the auction for the Blues, but published reports have indicated that MatlinPatterson was among those interested.
An integral aspect of TowerBrook’s participation in the buyout was the involvement of Dave Checketts.
Checketts is best known as the former president of the New York Knicks, and he serves on the board of JetBlue Airlines alongside TowerBrook’s Neal Moszkowski. He was also co-investor alongside the firm in an investment in college-sports broadcasting start-up CSTV Networks.
Through the Blues transaction, TowerBrook and Checketts will take over both the hockey club and the operating lease for the Savvis Center sports arena. The deal is still subject to a formal closing, which is expected to occur in two months.
Bill Laurie and his wife Nancy Laurie, a granddaughter of Wal-Mart co-founder Bud Walton, are the current owners of the Blues.