More Sports Turning to Private Equity

Private equity’s foothold in the world of sports is strengthening as teams and leagues look for new sources of cash amid the pandemic.

The NBA now permits investment firms to purchase limited stakes in teams, opening up the pool of potential owners as team valuations skyrocket.

Among opportunities on the table: a 5% stake in the Golden State Warriors for $200 million, which would give the team a $5 billion valuation. Also, CVC Capital Partners is seeking a 15% percent stake in the San Antonio Spurs at a $1.3 billion valuation.

“Part of it is financial,” NBA commissioner Adam Silver said, “but part of it is the amenities, and the cachet, and the desire to be directly involved with these leagues.” The NBA developments come as other sports, particularly soccer, experience an uptick in private investment.

• Italian soccer league Serie A created a new company to handle its media rights and sold 10% to CVC and Advent International, along with Italy’s FSI Fund, for over $2 billion.
• Bundesliga, Germany’s top league, recently offered a minority stake in its new digital media company for $362.7 million, attracting multiple private equity firms.
• In December, U.S. investment group ALK Capital purchased an 84% stake in English Premier League team Burnley in a deal believed to have cost ALK up to $270 million.
• Iowa-based Krause Group acquired 90% of Italy’s Parma Calcio 1913 in a deal reportedly valuing the team at more than $100 million.

Beyond the NBA and Serie A, CVC recently inked a reported $300 million investment deal with International Volleyball Federation and paid $415 million for a 14.3% stake in Europe’s biggest national rugby tournament, the Six Nations.