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Bain Capital rival CVC with €3bn Serie A investment offer

US Investment firm Bain Capital is set to go head-to-head with CVC Capital Partners for a stake in Italy's top flight football league.

According to Bloomberg, Bain Capital is set to offer 3 billion (US$3.4 billion) for a 25 per cent stake in the Serie A and see off the Luxembourg based private equity firm, CVC Capital. Both offers are said to mainly involve the control of the league’s media rights, which are worth around €1.3 billion (US$1.5 billion) annually, based off the existing three-year rights cycle that will expire at the end of next season (2020/21).

CVC Capital’s deal differs slightly from Bain’s as their preliminary offer would see them only take a 20 per cent role for a €2.2 billion (US$2.5 billion) investment. It is believed that CVC have been negotiating with the Serie A in a dedicated window that expires at the end of the month, opening up the opportunity for Bain Capital to own the stake. CVC’s 20 per cent role will be in the league’s TV rights sales and implementing funds to improve upon the leagues stadia that is considered to be holding the league back.

Only three teams from the 20 clubs competing in the Serie A own their stadiums, compared to 15 out of the 20 Premier League clubs owning their own stadiums, 16 out of 20 in La Liga and nine out of 18 in the Bundesliga, which is starting to forge a gap between the league and its European counterparts.

It was during the Italia 90 World Cup where many Italian stadiums were ordered to be renovated to meet the standards required that cost 84 per cent over budget, a debt that is still holding back many Italian clubs to this day. With many clubs not owning their own stadiums, it is difficult for clubs to make foreign investments in the way that other European leagues have been able to do.

An investment from CVC could mean that the stadia in the Serie A finally gets the renovation that it needs to be able to remain amongst the list of elite leagues in Europe.

Blackstone, another private equity group, has been rumoured to be considering loaning to the Serie A, as the league has lost significant revenue due to the Covid-19 crisis.

Whilst negotiations have been taking place for a significant investment, the Serie A have announced a partnership with Coca-Cola, which will be an official league sponsor as of the 2020/21 season.

Author: Jake Wilkin