The owner of stakes in Six Nations and Premiership Rugby and the top flights of French and Spanish football is plotting refinancing expected to value its sports portfolio at more than £9bn.
Sky News has learnt that CVC Capital Partners has hired Goldman Sachs, PJT Partners and Raine Group to advise on a deal involving SportsCo, a new entity established to optimise the buyout giant’s investments in the sector.
City sources said this weekend that the refinancing was likely to involve raising new debt against one of the largest private equity-owned sports portfolios in the world.
CVC also owns stakes in international volleyball, the women’s professional tennis tour and Indian Premier League cricket.
Sources said the refinancing would enable CVC to remain invested in its sports portfolio for longer, while also paving the way for the sale of a minority stake in SportsCo or a future initial public offering.
Last month, Sky News revealed that Marc Allera, the former boss of mobile phone network EE, had been recruited as chairman of SportsCo.
The creation of SportsCo is aimed at providing more cohesive support to CVC’s investments across the sector.
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Having made billions of dollars from its ownership of Formula One motor racing – one of the most lucrative deals in the history of sport – CVC has bought stakes in leagues and other assets spanning cricket, football, rugby union, tennis and volleyball over the last two decades.
Its investment in the media rights to La Liga – Spain’s equivalent of the Premier League – is expected to generate a handsome return for the firm, although a comparable deal in France has faced significant challenges amid broadcasters’ financial challenges in the country.
CVC’s backing of global sports properties is intended to position it to maximise their commercial potential through new media and sponsorship rights deals, as well as their expansion into new formats aimed at drawing wider audiences amid rapid shifts in media consumption.
In rugby union, its acquisition of a stake in Premiership Rugby’s commercial rights was hit by the pandemic and the subsequent financial pressures on clubs which saw a number of the league’s teams forced into insolvency.
CVC, which bought into Premiership Rugby in 2019, owns a 27% stake in the league.
Under its stewardship, broadcast audiences and attendances have turned a corner, with total TV audiences up 40% this year – partly as a result of an increase in the number of games being shown.
It recently agreed a more lucrative TV rights deal for the league.
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Sponsorship revenues are also said to have nearly doubled since CVC’s initial investment, with fan interest among the crucial 18-34 age demographic rising by 30% during the last year.
Its SportsCo strategy will see Mr Allera, who also chaired BT Sport, working across the CVC sports portfolio, with other executives expected to be recruited to assist the effort in due course.
One source last month likened the initiative to the approach employed by the luxury goods conglomerate LVMH.
They added that there would be parallels with the sharing of best practice used at US basketball’s NBA through its TeamBusinessOperations (TeamBO) unit to unlock collective opportunities and drive further long-term growth projects.
CVC’s sporting assets will continue to remain autonomous and independent of one another.
One expected benefit of the SportsCo approach would be the sourcing of new investment opportunities in future years, with another likely to mean CVC remaining a stakeholder in its existing portfolio for a longer duration.
SportsCo could be used as an acquisition vehicle for future CVC deals in the industry.
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The firm was recently outbid in an auction of major tennis tournaments by Ari Emanuel, the Endeavor founder whose company was also the seller of the assets.
Global sports properties have become one of the hottest growth areas for private capital in recent years, with firms such as Ares Management, Silver Lake Partners and Bridgepoint all investing substantial sums in teams, leagues and other assets across the industry.
CVC could not be reached for comment on Saturday.
