In recent years, there has been a major increase in private equity investment into the sports industry. With sectors like media rights, infrastructure, services, technology and equipment all primed for high growth, sports has become an extremely attractive area for private equity firms looking for new opportunities. This article will explore the key trends driving this influx of private equity money into sports, the major deals that have been made, and the future outlook for private equity investments in this industry. Drawing from recent examples across North America, Europe and Asia, it will illustrate how private equity is playing an increasingly pivotal role across all aspects of the sports business. With strong financial backing and expertise to accelerate expansion, private equity is set to shape the future of the global sports industry.
High growth potential across key sports industry sectors draws in private equity
Many factors make sports an appealing sector for private equity investment.Above all is the industry’s strong growth prospects across multiple segments. For example, media rights have become hugely valuable, especially with the rise of digital streaming. Private equity firms see major upside in acquiring rights packages, or even entire leagues and teams, to profit from long-term audience growth.Another key driver is sports infrastructure like stadiums and arenas. Major upgrades are planned over the next decade, requiring billions in capital expenditure. Private equity can provide this via acquisitions and development partnerships. The services side of sports has also attracted private equity attention. Areas like talent representation, analytics, sponsorship sales and marketing all offer ways for investors to apply expertise and expand into high-margin activities.With interest in sports technology surging, private equity is active here too, providing capital and guidance to startups across eSports, fan engagement platforms, performance tracking tools and more.And as sports equipment and apparel sales continue rising worldwide, private equity is leveraging brand management experience to accelerate expansion of portfolio companies into new markets and channels.With so many attractive sectors primed for growth, it’s no surprise private equity dealmaking in sports has intensified.
Major sports industry deals highlight growing private equity appetite
Many big-ticket private equity sports investments have made headlines recently.A prominent example is Silver Lake Partners’ acquisition of a 10% stake in City Football Group, owners of Manchester City FC, for $500 million in 2019. Silver Lake saw huge potential to grow City Football’s global footprint and media rights value.Other major deals have focused on rights holdings, like when RedBird Capital acquired a 15% stake in Fenway Sports Group, owner of Liverpool FC and the Boston Red Sox, for $750 million in 2021. This gave RedBird a share of the lucrative media rights of both teams.There have also been several private equity-backed acquisitions of entire sports franchises. This includes Harris Blitzer Sports & Entertainment, a firm backed by Blackstone and The Carlyle Group, purchasing a majority stake in the Philadelphia 76ers NBA franchise in 2011. And RedBird again was involved in Fenway Sports Group’s $900 million acquisition of the Pittsburgh Penguins NHL team in 2021.Private equity’s infrastructure play is evident in numerous stadium deals, like Silver Lake’s bid to acquire a stake in a new stadium for New Zealand rugby team Crusaders. On the services side, CVC Capital acquired a significant minority stake in sports marketing agency Lagardère Sports for around $1.5 billion in 2018. These deals accentuate private equity’s broadening sports industry presence.
Private equity investment in sports is increasing substantially, attracted by high-growth potential across media rights, infrastructure, services, technology and equipment. Major deals for stakes in teams, leagues, agencies and infrastructure highlight this growing appetite. With its financial resources and business expertise, private equity is poised to shape sports industry growth.