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CVC and Advent team up in €1.3bn bid for Italy's Serie A

CVC Capital Partners and Advent International have joined forces to offer €1.3 billion for a minority stake in Italy’s Serie A, according to reports.

The bid would see the private equity firms own a 10 per cent share in a new company that would oversee the league’s media rights, international trademark and commercial development.

The Italian top flight has seen numerous offers put forward from up to seven different groups throughout the coronavirus pandemic, including separate offers from CVC and Advent, who were once competing for the stake solo.

According to the Financial Times, the combined bid values the league at €13 billion, which is a considerable improvement on earlier valuations, thought to be at €11 billion with a 20 per cent stake from an earlier offer from CVC.

If the improved bid is successful, CVC would hold 50 per cent of the minority stake, with Advent holding a 40 per cent share. The outstanding 10 per cent would be owned by Italian private equity firm Fondo FSI. The bid would see the firms control 50 per cent of the board managing the league’s commercial affairs with the 20 teams controlling the remaining 50 per cent. An independent chair will hold a deciding vote.

CVC have habitually invested in sports properties on their own, however, the Financial Times report that joining up with other private equity firms would help to bring around the Serie A clubs hesitant to release the control they have of their commercial affairs to private investors.

Serie A president, Paolo Dal Pino, wrote a letter in July to the interested parties stating that there had been a 15 per cent limit set on any potential private investment.

Other organisations that have expressed an interest in investing in the Serie A are Bain Capital, Wanda-Infront, Apollo Global Management, General Athletic and TPG Capital. French financial consultancy Lazard was employed to weigh the bids.

It was reported that CVC was given a six-week negotiating window after a €2.2 billion bid for a 20 per cent stake in the company managing the league’s rights, which is understood to have included an investment fund to develop stadiums in Serie A. Italian clubs have not seen significant investment in financing the development of new stadiums since hosting the 1990 FIFA World Cup.

The deadline for bids was pushed back from August 25 to August 28 with club presidents then set to decide on the winning bid by September 9. 14 clubs will have to vote in favour of creating the new rights management company before voting on which bid they prefer.

CVC and Advent have experience in owning stakes across sport. CVC previously owned Formula One and have since acquired England’s Premiership Rugby and the Pro14 provincial rugby union competition. Advent once owned sports rights marketing agency Sportfive but sold it to the French media titan Lagardère.

The domestic live rights to Serie A games are currently held by Sky and DAZN, whilst IMG holds the international rights in deals worth €973 million and €380 million per season respectively.

Author: Jake Wilkin