Private equity firm CVC Capital Partners are in talks to buy a minority stake in National Basketball Association (NBA) franchise the San Antonio Spurs.
The potential move comes after the NBA has reshaped the ownership structures of its franchises, allowing private equity firms to purchase minority stakes in multiple teams.
The deal would value the Spurs at US$1.3 billion.
It has been reported by the Financial Times that a 15 per cent stake in the club, which is currently owned by the Holt Family, could be purchased by the Luxembourg-based group.
Throughout the coronavirus pandemic, private equity groups have been able to exploit the financial turmoil that sport has found itself in by offering cash injections by purchasing minority stakes. Those sports include, football, rugby, motor racing and this week, volleyball.
According to reports, negotiations first started a year ago, however, they slowed to an eventual halt due to the strict regulations in place that would have made an agreement difficult, or even impossible.
The proposed sale comes shortly after the NBA moved closer to allowing their teams sell minority stakes to private equity investors in a bid to generate greater competition and see further rises in valuations for teams across the league.
The coronavirus pandemic has had a detrimental impact on the finances of many sectors across the US, leading to suggestions that some owners are interested in freeing up capital by selling their minority stakes.
The news of a possible investment into the San Antonio Spurs follows reports of investors in the Golden State Warriors willing to part ways with 5 per cent of their shares in the franchise.
Author: Jake Wilkin