Private equity in sport
27 October 2020
The sports industry has traditionally been cautious when it comes to private equity investment. However, in the last 18 months there has been a notable shift in activity and appetite on both sides of the field. The private equity investments in A.C. Milan and the Six Nations rugby for example are high profile cases of this.
Our joint report with The Sports Consultancy (TSC) explains what sports businesses must consider in order to attract the right investors, why now is the right time for sports businesses to strike private equity deals and how the deal should be structured to ensure success for both parties.
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Examples of private equity investment in sport have been relatively sporadic and isolated. Aside from the largest and most notable sports properties and brands, there have been very few examples.
A number of factors have historically limited deals including:
- Overlap of regulatory and commercial aspects of sports organisations
- sport’s unique relationship with stakeholders
- sport’s ability to adapt and innovate, or lack of it.
However, investors and sports entities are increasingly finding innovative ways to collaborate and accelerate growth. Private equity are increasingly attracted to sports organisations for the following reasons:
- Emerging sports on an upward trend, in particular women’s sport and e-sports
- predictable and growing revenues for established sports
- new opportunities within existing sports.
Sports organisations are relatively recession proof but are looking for commercial expertise to help maximise the value of participation and leverage new partnerships. This is all the more true as the sports organisation look to recover from the economic impact of the COVID-19 pandemic.
The deal activity has grown as both sides identify opportunities to both weather the shorter-term challenges posed by the pandemic and to position themselves to enter the “new normal” stronger.
To find out more about how sports entities can navigate the deals, download the full report.
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If you would like to discuss this edition of the report further or any wider sector issues, please contact Ian Clayden National Head of Professional Sports.