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Private equity groups line up for €1.5 billion French football deal

Formal bids for a €1.5 billion deal with France’s Ligue 1 are being prepared by private equity groups CVC Capital Partners, Hellman & Friedman, Silver Lake and Oaktree Capital, as the league progresses. The country’s top football players are looking to recover from a catastrophic period that has left many of the clubs in financial trouble.

The Ligue de Football Professionnel is selling shares in a start-up that will market its television and streaming rights, in an auction that has attracted the attention of acquisition groups at a time when many increasingly want to make sports deals.

People familiar with the process said that more than 10 private equity groups submitted early-stage, non-binding expressions of interest in December, a pool that has now been reduced to a small number of investors. A rival bidder will submit an offer by the end of March. 9.

This will be the first European league deal since Spain’s La Liga agreed to a €2 billion funding deal with CVC Capital Partners. That move won the favor of clubs in December despite opposition from Barcelona and Real Madrid, two of the country’s most successful clubs, who made the last-ditch effort. to derail and was ultimately opted out.

Silver Lake has a stake in City Football Group, which owns Manchester City, and a stake in French Ligue 1 club ES Troyes. Oaktree owns French Ligue 2 club Caen, and has privately sponsored the club. Italy’s Inter Milan.

The Buyout EQT team considered the deal at an earlier stage, but is no longer involved, people familiar with the matter said. Italy’s Serie A and Germany’s Bundesliga have both considered selling shares to private equity groups, but talks over a deal for both have broken down following objections from some clubs.

The LFP’s move marks an attempt by president Vincent Labrune to turn the fortunes of the post-pandemic game. The federation is seeking a cash injection of 1.5 billion euros, which will be used to attract new funds to its clubs. It is asking bidders to specify the amount they are seeking in exchange for that amount, rather than competing on price.

The union could sell up to 15% of the new company that holds the media rights, people familiar with the process said. That would value the company at around 10 billion euros, about 13 times its 2019 earnings, one of them said.

Ligue 1, Europe’s fifth-largest grossing, fell into crisis in 2020 when its broadcast partner Mediapro stopped paying installments for its €780 million annual TV rights deal.

That forced the federation to take on debt, including a 225 million euro state-backed loan, and resell rights until the end of the 2023-24 season in a new auction won by Amazon.

The pandemic has also led to a sharp drop in ticket sales, merchandise and sponsorships for football clubs as lockdowns forced matches to take place in empty stadiums.

All four private equity groups declined to comment.

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