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Serie A sets 15% limit on private equity investment

Italy’s top tier football league, Serie A have placed a 15 per cent limit on any potential private equity investment in the league.

News of the introduction of the cap was revealed in a letter from Paolo Dal Pino, Serie A president, to seven of the interested parties believed to be – Bain Capital, CVC Capital Partners, TPG Capital, General Athletic, Wanda-Infront, Apollo Global Management, and Advent International. It has also been reported that Blackstone are prepared to loan €100 million (US$114.5 million) to Serie A to help with any financial damages caused by Covid-19.

July 24 is set to be the deadline for a proposed investment, as Paolo Dal Pino’s letter clarified the bidding criteria. A stipulation within the criteria states that the offer must include "terms and conditions for the establishment of the partnership…for the minority shareholding to be sold by Lega Serie [A], up to a maximum limit of 15 per cent of the capital."

The letter also states that proposals require a legal assessment confirming the terms and conditions of the bid comply with Italy’s Melandri Law, which governs the collective selling of media rights in Italy. In addition, firms who may be interested have to outline “the structure relative to the governance of the partnership as well as the veto mechanisms on any matters reserved for the shareholders’ meeting and the board of directors”.

It’s believed that Serie A clubs are against the proposed investment into the league, which aims to solve the €500 million (US$572.6 million) financial impact of Covid-19 on clubs. However, involves teams losing out on competition media rights and revenues.

Reports have suggested that the solution is to place investment into a completely new company which will be used to control Serie A itself, ringfencing the share of the league that is owned by the clubs. This comes as the latest twist in Serie A’s investment saga.

News of CVC holding exclusive talks with the league sparked interest with a reported €2.2 billion (US$2.4 billion) proposal for a 20 per cent stake in a new company geared to manage the broadcasting rights, trademark and commercial development of the league, while help part-finance an investment fund for stadium development. However, it’s believed that the negotiation window has apparently expired allowing other interested firms to enter the fray.

Author: James Parker