The Business of Sport – September
The financial crisis in English rugby
Despite the historic financial strength of the RFU, Wasps have joined Worcester in a fight for their existence.
Earlier this month, the RFU warned Worcester they face suspension and possible liquidation if they cannot repay their c.£25m debt by Monday 23rd. Following this deadline, the RFU are not pursuing actions for suspension from all competitions.
Shortly after this announcement, Wasps filed notice in the High court of their intention to appoint an administrator. The former European Champions have been unable to meet the deadline to pay back £35m in bonds, utilised to finish the relocation to Exeter.
Lacking the financial might of Football or the American market, a private equity scoop looks unlikely in English Rugby, giving the domestic game a gloomy outlook if the current model persists.
Terms agreed for City Football Group’s entrance into Brazilian market
The City Football Group have reportedly made a c.$190m offer to acquire Brazilian Serie B team Esporte Clube Bahia.
The deal is for 90% stake in the team, with an option to add another 5%. Sports Illustrated reported last week that the deal is almost complete, pending final legal due diligence.
The deal would see CFG add a 12th club to its world-leading portfolio. In addition to City, the portfolio includes New York City FC, Melbourne City and Girona.
Revealed earlier this month, the deal complements the secondary investment by Silverlake in early 2022 from 10% to 14.5%, reaffirming their commitment to the multi-club ownership model.
BBC secures five-year deal for MLB rights
Launched on the 24th September, Major League Baseball has secured a five-year media rights agreement with the BBC.
The BBC now airs regular-season games each season, ‘tailored to appeal to both existing and new baseball fans’ in the UK. The MLB Network-produced game will be shown live on BBC iPlayer.
UK-based games, in particular the Chicago Cubs/St. Louis Cardinals June 2023 Series in London, will be shown across the pond.
The BBC broadcast will include retired Yankees pitcher CC Sabathia, Baltimore Orioles MLB broadcaster Melanie Newman, and The Maccabees’ guitarist Felix White, who co-hosts the highly popular tailenders on BBC sounds.
RedBird Capital sells stake in OneTeam Partners
Leading US investment group RedBird Capital Partners is selling a 40% stake in player IP licensing business OneTeam in a deal valuing the company at c.$1.9bn.
OneTeam Partners was formed in 2019 by RedBird in partnership with the NFL and MLB player associations, designed to help athletes maximise the value of their name, image and likeness rights.
In selling the minority stake to HPS, Atlantic Park and Morgan Stanley, the transaction will support OneTeam through the next stage of its growth cycle,
Ares Management raises $3.7bn for investments focused on the sports industry
LA-based hedge fund Ares Management has raised $3.7bn, focused exclusively on sports teams, leagues, and sports-related franchises, as well as entertainment and media companies,
The Sports, Media and Entertainment fund significantly over raised its initial target of $1.5bn. The leading fund will be comprised of equity commitments totalling $2.2bn, enhanced by ‘anticipated leverage and related transaction vehicles’ delivering a further $1.5bn of capital.
Existing investments from the group include Atlético de Madrid, Inter Miami, the San Diego Padres, and McLaren Racing.