The owner of stakes in Six Nations and Premiership Rugby and the top flights of French and Spanish football is in talks with a pack of financial giants about a refinancing of its £9bn sports assets portfolio.
Sky News has learnt that CVC Capital Partners’ Global Sport Group (GSG) is in talks with firms including Ares Management about a multibillion dollar debt deal.
Details of the potential structure of an agreement, as well as the identities of other parties in discussions with CVC, were unclear on Wednesday.
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Sources close to the situation said, however, that a financing package was expected to be secured on favourable terms because of the underlying credit quality of the assets in the portfolio.
US-based Ares, which would be expected to lead the GSG syndicate if it proceeded with a deal, has become a major player in the burgeoning provision of private credit for sports assets.
It was among the big winners from the recent sale of McLaren Racing, owner of the eponymous Formula One team, has received substantial proceeds from the sale of a stake in Crystal Palace Football Club, and recently invested in SailGP.
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Ares is also raising its second institutional sports fund, which had a first close to lock in investors’ capital commitments at $1bn earlier this year.
Sky News revealed during the summer that CVC had engaged a trio of banks to explore plans for a refinancing of what was at the time referred to internally as SportsCo and which has since been renamed Global Sport Group.
The portfolio also incorporates stakes in international volleyball, the women’s professional tennis tour and an Indian Premier League cricket franchise.
Goldman Sachs, PJT Partners and Raine Group are advising on the refinancing of GSG, which has been set up to optimise CVC’s investments in the sector.
The deal is expected to allow 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.
Marc Allera, the former boss of mobile phone network EE, has been recruited as GSG’s chairman, with a number of other senior executives also appointed to management roles.
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 a spectrum of elite sporting assets 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.
Its sporting assets will continue to remain autonomous and independent of one another, despite the new umbrella holding entity.
One expected benefit of the SportsCo approach would be the sourcing of new investment opportunities, with CVC being linked to a bid for one of the new European NBA basketball franchises which is expected to be sold in the coming months.
Global sports properties have become one of the hottest growth areas for private capital in recent years, with firms such as Ares, Silver Lake Partners and Bridgepoint all investing substantial sums in teams, leagues and other assets across the industry.
Apollo Global Management was last month reported to be seeking to raise $5bn to invest in sports assets.
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Ares and CVC declined to comment.
