The owner of stakes in the Six Nations, Premiership Rugby and elite French and Spanish football is in talks with a group of financial giants over a refinancing of its £9bn portfolio of sporting assets.
Sky News has learned that CVC Capital Partners’ Global Sport Group (GSG) is in talks with companies including Ares Management over a multi-billion dollar debt deal.
Details of the potential structure of a deal, as well as the identities of other parties in discussions with CVC, were unclear Wednesday.
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Sources close to the matter, however, said a financing package would need to be secured on favorable terms due to the underlying credit quality of the portfolio assets.
US firm Ares, which is expected to lead the GSG syndicate if it strikes a deal, has become a major player in the growing supply of private credit for sports assets.
He is among the big winners from the recent sale of McLaren Racing, owner of the eponymous Formula 1 team, received substantial proceeds from the sale of a stake in Crystal Palace Football Club and recently invested in SailGP.
Ares is also raising its second institutional sports fund, the first close of which secured investor capital commitments at $1 billion earlier this year.
Sky News revealed over the summer that CVC had engaged a trio of banks to explore plans to refinance what was at the time internally called SportsCo and which has since been renamed Global Sport Group.
The portfolio also includes stakes in international volleyball, the women’s professional tennis circuit and an Indian Premier League cricket franchise.
Goldman Sachs, PJT Partners and Raine Group are advising on the refinancing of GSG, which was put in place to optimize CVC’s investments in the sector.
The deal is expected to allow CVC to remain invested in its sports portfolio for longer, while paving the way for the sale of a minority stake in SportsCo or a future IPO.
Marc Allera, the former boss of mobile phone network EE, has been recruited as president of GSG, while several other senior executives have also been appointed to management positions.
After making billions of dollars from its stake in Formula 1 – one of the most lucrative deals in sporting history – CVC has purchased stakes in leagues and other assets spanning a wide range of elite sporting assets over the past two decades.
Its investment in media rights to La Liga – Spain’s equivalent of the Premier League – is expected to generate a significant return on investment for the company, although a comparable deal in France has faced significant difficulties due to the financial difficulties of the country’s broadcasters.
CVC’s support for global sports properties aims to enable it to maximize their commercial potential through new media deals and sponsorship rights, as well as their expansion into new formats aimed at attracting wider audiences amid rapidly changing media consumption.
In rugby union, the acquisition of a stake in Premiership Rugby’s commercial rights was affected by the pandemic and subsequent financial pressures on clubs, forcing a number of teams in the league into insolvency.
CVC, which bought Premiership Rugby in 2019, has a 27% stake in the league.
Its sports assets will continue to remain autonomous and independent of each other, despite the new umbrella entity.
One of the expected benefits of SportsCo’s approach would be the pursuit of new investment opportunities, with CVC linked to a bid for one of the NBA’s new European basketball franchises, which is expected to be sold in the coming months.
Global sports properties have become one of the hottest growth areas for private equity in recent years, with companies such as Ares, Silver Lake Partners and Bridgepoint all investing substantial sums in teams, leagues and other assets in the sector.
Apollo Global Management last month reportedly sought to raise $5 billion to invest in sports assets.
Ares and CVC declined to comment.