Private equity firms vie for media rights of France’s Ligue 1

Media rights to European soccer leagues are an increasingly coveted prize for global private equity firms making a play for exposure in the international world of sports.

In one of the latest bids, firms including CVC Capital Partners, Silver Lake, Hellman & Friedman and Oaktree Capital are said to be vying for a minority stake in the newly formed media unit of French soccer league Ligue 1.

The league’s media company will market the TV and online broadcast rights for matches played by clubs like Paris Saint-Germain, Nice and Marseille, Reuters reported.

Bids for the minority stake were submitted prior to the March 9 deadline, valuing the equity holding at around $1.6 billion, according to reports.

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The latest round of bidding speaks to the growing ambitions that private equity firms are pursuing toward sports globally, said Wylie Fernyhough, a senior PE analyst at PitchBook.

“The value of media rights surrounding live sporting continues to grow and I see no indication that it will slow down during the next decade,” Fernyhough said. “We are seeing teams and leagues institutionalize and treat sports franchises more like businesses, rather than simply crown jewel assets.”

CVC and Hellman & Friedman declined to comment on the bid. Representatives for Silver Lake, Oaktree Capital and French soccer governing body Ligue de Football Professionnel didn’t immediately respond to requests for comment, but winning a stake in Ligue 1’s media business would add to recent European soccer bets made by several of the firms.

Last year, CVC and Spain’s topflight soccer league, La Liga, reached a €2 billion (about $2.3 billion) deal to establish a new company that would receive revenue from the league’s broadcasting and sponsorship rights for the next 50 years. CVC would retain an 8.2% stake in the company as part of the deal.

However that partnership is in limbo because of a lawsuit filed by the Real Federación Española de Fútbol, and soccer clubs Barcelona, Real Madrid and Athletic Bilbao.

In 2020, Oaktree Capital acquired France’s Stade Malherbe Caen soccer club. Silver Lake completed a $500 million investment in 2019 in City Football Group, which controls Manchester City Football Club and owns or has partial stakes in seven soccer teams around the world, including New York City, Melbourne City and Girona.

By landing a deal with Ligue 1, firms would gain access to a steady, somewhat predictable cash flow that is slated to grow faster than inflation over time, Fernyhough said.

If structured correctly, a media rights deal could also provide investors with meaningful returns and cash flows without the same type of risk inherent in many debt-fueled buyouts.

“Private equity has been interested in sports for years and this underscores that trend,” Fernyhough said.

Source: PitchBook

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