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 Private Equity in Sport – benefit or curse?  THE JOURNAL OF SPORT,  LEISURE & RISK  WITH AN INTERNATIONAL PERSPECTIVE  March 2022

 It hasn’t been all plain sailing though,   to make investments in franchises for a   Yet it is no wonder these firms are pulled   Sport is now becoming flooded with private
 as complications, especially in CVC’s   minority stake. This satisfied the egos   towards sport. Consumers behave with   equity but with negotiations slow and
 dalliance in the European soccer world,   of billionaire team owners who were   their hearts, feeling their club represents   mounting stakeholder protests, not every
 caused much controversy and push   unwilling to relinquish all their control and   their community and is therefore a lifetime  deal will appease all those who love their
 back. A deal with the Spanish La Liga   diminish their role in club decision making,   of loyalty with no substitutes available.   sport. This is the long game and strong
 in December 2021 with CVC putting in   but they all understood that in US sports   Supporting your team is a necessity not   reliable relationships take time to develop.
 2.7 billion euros to rescue the cash poor   if you have enough cash, no-one will ever   a luxury. Guaranteed income from match   When the turnstiles and cash registers in
 Spanish league was welcomed by all. The   lose their place at the top table.   day revenue, merchandise, sponsorship,   sport started clicking 150 years ago, people
 deal meant La Liga will reward CVC with   broadcast rights ensures a regular return   questioned those who were making money
 8.2% of the League’s media rights for the   In New Zealand rugby however, this   for investors.   out of our pleasures. In 2022, the same
 next fifty years and La Liga claimed it was   resistance has been most evident, when   questions are still being asked.
 all about securing their own future and   Silver Lake Capital agreed a 12.5 per   The global digital reach of sports and
 surviving in a competitive digital global   cent share in the All Blacks for NZ$387.5   new formats such as The Hundred in
 marketplace, bringing in that all-important  million in 2021 with the funding being   English cricket and the new International
 non-matchday income.  needed, in particular, to support women’s   Swimming League brings in a new
 rugby and develop local talent in the light   generation of fans who are ready and
 Five Spanish clubs including Real Madrid   of massive pandemic losses. Protests   willing to part with their cash.
 and Barcelona disagreed with the deal   came quickly, as many became concerned
 as they believed that CVC would get too   about the inference that their national
 much of the financial benefits that they, as   sport, with so many cultural and social
 super-brands, bring to the League. Similar   connections, would be damaged. In
 CVC agreements with Italy’s Serie A and   particular, the Maori Haka tribal dance,
 the German Bundesliga have already been   performed by players with such passion
 blocked or fallen through as clubs protested  and style in front of the opposition before
 despite the pandemic losses. It reveals   every game had to be protected from any
 that many in Europe’s largest leagues are   commercial motives. The New Zealand
 hesitant about allowing into their game   Rugby Players’ Association worried about
 those whose mission is all about the   Silver Lake’s influence, stated in a letter to
 money and who ignore the strength and   the new owners, that the players saw ‘an
 independent spirit of those who make the   inherent risk of real or perceived cultural
 game strong in the first place.  misappropriation given Silver Lake is an
 Anglo-American private equity firm’.
 In the land of capitalism, US sports have
 made compromises to avoid conflict
 between the money-men, with the
 National Basketball Association (NBA),
 the National Hockey League (NHL), Major          Sport is now becoming flooded
 League Baseball (MLB) and Major League           with private equity but with
 Soccer (MLS) all allowing private equity
                                                  negotiations slow and mounting
                                                  stakeholder protests, not every

                                                  deal will appease all those who

                                                  love their sport.

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