Deeper Into Pro Sports Both in Europe and in North America, leagues are making more room for institutional investors hungry for media Wiggins of the Golden State Warriors rebounds the ball during a game against the Orlando Magic Fernando Medina/Getty Images Wittenberg, Irene Garcia Perez, David and Henry +Follow24 March 2022, 14:30 GMT+5:30The sports world took a lot of hits during the pandemic—tournaments were canceled, stars were sidelined, and teams often played in empty stadiums. For buyout funds flush with cash, that looked like an opportunity.$51 million on sports transactions globally last year, with $22 billion in Europe alone, according to Pitch Book. $3 billion buying minority stakes in sports franchises. For leagues and teams, these investments offered stable liquidity at an uncertain moment. The draw for private equity was even simpler: a rare chance at attractive deals after decades of climbing prices for franchises. “Covid showed the resilience of these businesses even when one part of the value chain—the live event—gets turned off,” says Gerryfounder of sports-focused firm RedBird is well established. But European soccer clubs, unlike professional teams in the U.S., are always at risk of being relegated to lower divisions after a poor season. So institutional investors are increasingly targeting top football leagues instead of individual teams to better guarantee returns. In December, Luxembourg-based €2 billion ($2.2 billion) agreement with Spain’s investing in a newly-created company that gives it a share of broadcast revenue. In return, clubs in Spain’s first and second divisions get money to invest in infrastructure, but also to repay debt and sign players. Marseille during a French Ligue 1 match against on March 20 John Berry/football league may be next. Ligue 1 is in talks with CVC for a minority stake in the league’s media rights business. The league—which boasts such stars as Kylian Mbappé, Lionel Messi, and Neymar—is recovering commercially from the pandemic and the collapse in 2020 of what should have been a lucrative broadcasting deal with the communications group(Amazon.com Inc. later picked up the majority of Ligue 1 games, but for far less money.) leagues have warmed up to the idea of letting institutional investors buy into teams. In 2019, Major League Baseball moved to allow investment funds to buy stakes in multiple teams so that part owners could more easily sell, and the National Basketball Association and Major League Soccer followed suit soon after. The NBA in 2020 set up a deal for Blue Owl Capital Fund to be able to buy minority stakes in multiple teams. Deal took a 6% stake in the Atlanta Hawks in January and one of less than 5% in the Phoenix Suns in July. It also holds shares in the Sacramento Kings
Major League Soccer followed suit soon after. The NBA in 2020 set up a deal for Blue Owl Capital Fund to be able to buy minority stakes in multiple teams. Deal took a 6% stake in the Atlanta Hawks in January and one of less than 5% in the Phoenix Suns in July. It also holds shares in the Sacramento Kings Deal took a 6% stake in the Atlanta Hawks in January and one of less than 5%
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