Why sport is a guaranteed win for private equity

Jun 27, 2022 | News | 0 comments

Whenever sport is for sale, private equity is not likely to be very far away.

Matchroom Sport, the privately-owned promotions company led by father-son duo Barry and Eddie Hearn, is reportedly the latest to be a target of private equity investment.

Some of the biggest private equity names such as KKR, CVC Capital Partners and Searchlight Capital are said to be interested in a deal, according to Sky, which pointed to a possible 25% stake in the Essex-based firm being priced at around £175m.

If such a deal were to occur it would value the 40-year-old business – which was initially founded as a vehicle to promote 1980s snooker champion Steve Davis and nowadays counts boxing superstars Anthony Joshua and Canelo Alvares as its flagship clients – at somewhere between £600m and £700m.

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Matchroom is far from alone in regard to attracting the attention of private equity.

Chelsea Football Club were bought for more than £4bn by LA Dodgers and Draftkings co-owner Todd Boehly, supported by funds from PE-buyer Clearlake Capital.

Luxembourg-headquartered CVC Capital has been particularly active in sports businesses taking stakes in Spain’s top football division, LaLiga, Indian Premier League cricket team Gujarat Titans, and has 14% stake in the Six Nations international rugby union championship.

CVC was rumoured to be in the bidding for a slice of the company that owns the commercial rights for the New Zealand All Blacks rugby team, but, was pipped to a deal by Silver Lake, the private equity firm that was among the buyers of the UFC back in 2016.

We could go on, but, there’s no need to labour the point too.

Source: Proactive Investors

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