The sports world took a lot of hits during the pandemic—tournaments were canceled, stars were sidelined, and teams often played in empty stadiums. For buyout funds flush with cash, that looked like an opportunity.
Private equity firms spent $51 billion on sports transactions globally last year, with $22 billion in Europe alone, according to PitchBook. In North America they spent almost $3 billion buying minority stakes in sports franchises. For leagues and teams, these investments offered stable liquidity at an uncertain moment. The draw for private equity was even simpler: a rare chance at attractive deals after decades of climbing prices for franchises. “Covid showed the resilience of these businesses even when one part of the value chain—the live event—gets turned off,” says Gerry Cardinale, founder of sports-focused firm RedBird Capital Partners.
In Europe, private equity’s role in sports is well established. But European soccer clubs, unlike professional teams in the U.S., are always at risk of being relegated to lower divisions after a poor season. So institutional investors are increasingly targeting top football leagues instead of individual teams to better guarantee returns. In December, Luxembourg-based CVC Capital Partners struck a €2 billion ($2.2 billion) agreement with Spain’s LaLiga, investing in a newly-created company that gives it a share of broadcast revenue. In return, clubs in Spain’s first and second divisions get money to invest in infrastructure, but also to repay debt and sign players.
