Does anyone work in the sports sector of investment banks? If so, could you share your experience in terms of what you do? I have seen many private equity firms invest in sports franchises, in the past couple of years? Is it just me, or is anyone else interested in this niche market?
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Raine does a fair amount in sports, as does PJT, Moelis and EVR here and there, but it's such small potatoes to be honest. Sports franchises are super "inside baseball" (pun intended) in that you're selling trophy assets, so valuation kinda goes out the window and it's all about who wants to buy, which is generally ego and emotionally driven (Stevie Cohen, etc). There's not many deals occurring and the ones that are, relative to the mega deals, are fairly small. Think about it, the most valuable teams in the world, Yankees/Cowboys/Real Madrid are what, $5bn? Those aren't the teams which come to market either: the Mets went for like 2bn. Again - small potatoes compared to regular way M&A.
What usually happens is that there are a few brokers who know all the franchise owners and league management. These guys get hired on most of the deals and you really can't get anything done without them. One of these guys taught an MBA class of mine and talked about how it's mostly back of the envelope valuations that devolve into who is willing to pay more, not based on $10mm and 4 weeks due diligence, but on how bad they want to own a team. It's cool, don't get me wrong, but it's investment banking at its brokeryest and the dynamic is closer to selling high end residential real estate than true M&A.