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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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