Throughout the last 12 months, a trend of sports teams and leagues welcoming bids from private equity firms has swept across the industry, however, the German Bundesliga has taken a stand against it.
On Wednesday, clubs from the Bundesliga and Bundesliga 2 voted to suspend talks with private investors for the leagues’ international media rights.
Firms including the likes of KKR, Bridgepoint, and CVC Capital Partners were looking to purchase 25 per cent of a new US$2.4 billion media company that would hold the rights.
It has been suggested that the rejection of any potential deal may be indicative of some sports being wary towards private equity, due to the role it played as part of the disastrous European Super League debacle last month.
Private equity has caused some controversy around the sports industry, with Serie A president Paolo Dal Pino facing calls for his resignation from Juventus, Inter Milan, and five other league clubs over his initiative to sell 10 per cent of the league’s media rights to private investors through a new company.
Silver Lake also sparked backlash after it attempted to purchase 12.5 per cent of future revenues generated by New Zealand rugby team, the All Blacks for US$288 million.
However, private equity has also been welcomed in some areas of sort, particularly in the US, where sports such as The National Basketball Association (NBA), Major League Baseball (MLB) and Major League Soccer (MLS) have all adapted their rules over the last two years to allow for more private equity money.
Author: Jake Wilkin