Soccer continues to be in the sights of private capital investors. But not all investors are the same. Indeed they are generally distinguished by two very different approaches. On the one hand there are those who aim to invest in individual companies, while on the other hand there are those who aim to invest in the media rights of the various national leagues.
On the individual team front, it is easy to meet entrepreneurs and financiers with large personal assets or their family offices or the holding companies of their industrial groups. In this case, it is a question of investments that have more of an image logic than a financial logic. Or that they have a different objective than the pure management of the football business. Often the goal is the real estate business that can result from the redevelopment of city stadiums.
From this point of view, for example, in Italy the negotiations underway for 75% of Pisa Calcio by Alex Knaster, the Russian Jewish financier and founder of Pamplona Capital, should be read (see here a previous article by BeBeez). It is said that Mr. Knaster is also very interested in the business represented by the renovation of the team’s stadium, Arena Garibaldi. For Mr. Knaster this is the third attempt to bring home control of an Italian soccer team. He had already tried the shot in the past together with Jamie Dinan (the founder of York Capital), when in August 2019 he wanted to buy Sampdoria (see here a previous article by BeBeez), but the deal was then wrecked and the Genoa-based club is still today is looking for an investor. Last December he was said to have received a 110 million euros offer by a mysterious investor (see here a previous article by BeBeez). Vialli, Dinan and Knaster also had been in talks for buying Parma Calcio in December 2019, which then, after various other unsuccessful negotiations, was sold last September 2020 to the American entrepreneur Kyle Krause, who bought 90% of the capital of the soccer team and 99% of the shares of Progetto Stadio Parma srl, the company committed to the modernization of the Tardini stadium (see here a previous article by BeBeez). In December then came the investment of the American family office North Six Group, chaired by the Italian financier Matt Rizzetta, in the capital of Campobasso Serie B soccer team, alongside the Swiss-based Halley Holding (see here a previous article by BeBeez).
On the soccer leagues front, on the other hand, traditional private equity funds are deployed, which aim at diversifying risk, investing in the TV rights of a large basket of teams. This is the case of the deal underway on Italy’s Lega Calcio Serie A, with representatives of the Serie A clubs who have approved the offer of the CVC Capital Partners-Advent International-FSI consortium to proceed with the project to set up a media company to which TV rights of the 20 associated clubs will be transferred. As it is well known, the funds are willing to invest 1.7 billion euros to have 10% of the media company (see here a previous article by BeBeez). Moreover as part of the deal last June CVC was said to be studying the launch of an infrastructural fund, which could provide financial support for the creation of new stadiums, for Italian clubs that have planned it or for the renovation of existing stadiums (see here a previous article by BeBeez). The three funds have meanwhile given a mandate to headhunter Egon Zehnder to search for the ceo of the new media company (see Reuters here).
The German Bundesliga has also been working on a similar operation since last November, namely the spin-off of TV rights in a media company whose minority can be sold to funds (see Sportspromedia here). In that case, the deal is smaller: we are talking about an investment of funds for 200-300 million euros on a total value of the newco of just over a billion. The list of interested parties cited by Bloomberg, FT and various other international media in recent weeks is practically the list of the world’s leading private equity funds: Advent International, Apax, Ardian, Apollo, Bain Capital, BC Partners, BDT Capital, Blackstone , Bregal, Bridgepoint, Carlyle, Centerbridge, Cinven, CVC Capital Partners, Endeavor (together with Silver Lake), General Atlantic, Goldman Sachs Principal Investment, IGC, HIG, KKR, Nexicap, Permira, Searchlight, TPG. On the funds desk there is also the dossier of the French Ligue 1: the president Vincent Labrune has in fact announced that the league is studying in turn the project to create a newco that manages the commercial rights. While the Spanish La Liga has already created its newco LaLiga Tech which will manage the commercialization of digital media rights and which is valued at 450 million euros. President Javier Tebas confirmed that he is in talks with many well-known investment funds, including CVC and Bruin Sports Capital (see Sportspromedia here).
Halfway between the two approaches, there are credit funds and hedge funds. Who on the one hand have been interlocutors of the Lega Calcio Serie A and are potential counterparts of the Bundesliga (such as Blackstone, KKR and Apollo Global Management), as an alternative to an investment in the equity of a media company. But on the other hand, they often finance big clubs, eventually becoming the owners of them as happened in the case of Italy’s iconic Serie A soccer team Milan with the Elliott fund, when the Chinese financier Yonghong Li, in 2018, did not repay his debt with the fund (see here a previous article by BeBeez).
Now BC Partners, in the list of Bundesliga suitors, is studying the investment in FC Inter, another Italy’s iconic Serie A soccer team, which is looking for new finance to support the working capital and refinance the 375 million euro bond maturing at the end of 2022 (see here a previous article by BeBeez). The fact that one of the major paneuropean private equity funds is studying the dossier of a single team leaves the scheme outlined above and it will therefore be interesting to see, if the deal goes through, how the fund will manage a business that, precisely, from the traditional international private equity giants is always been seen as too risky. Perhaps even here the real goal is to participate in the business of the new San Siro stadium. And BC Partners launched its real estate platform in 2018.
Also the new San Siro stadium was surely one of the major reasons why Bernard Arnault, owner of the luxury French giant LVMH, had also looked at when he approached Elliott to acquire Milan last year (see here a previous article by BeBeez).