This article was supported by RTC’s Research Analyst Joseph Chiang. If you are a college junior or senior with IB/PE experience interested in supporting RTC’s research, check out the internship description.
Today we are shifting gears from roll up case studies to a more esoteric (although becoming more mainstream) topic of investing in professional sports teams.
State of Play
Sports investing is one of the hottest trends in private equity today. Just this past week, KKR agreed to acquire Arctos Partners, a prominent investor in professional sports franchise stakes, for a whopping $1.4 billion.
The sports investing category initially began as a relatively niche strategy pioneered by top media investors buying media/broadcasting rights and independent sports tournaments, including:
CVC’s acquisition of Dorna sports (MotoGP) (1998)
Providence’s acquisition of YES Network (New York Yankees) (2002)
CVC’s acquisition of Formula 1 (2006)
Providence’s acquisition of Ironman (2008)
Now it’s become a more mainstream hunting ground, as the ecosystem of companies matured across consumer, media, and technology vendors dedicated to sports.
Private Equity Backed Sports Companies
Source: Houlihan Lokey
Latest hot trend? Investing in sports teams. Let’s dig into the history, business model, and a case study in Clearlake’s buyout of Chelsea FC in 2022.