Mega fund PE in sports deals
How are mega cap sponsors underwriting these sports deals (celtics, NFL, etc)? Struggling to wrap my head around long term end game and approach to liquidity at current valuations and predictable single digit growth and breakeven (?) profitability?
Lots of people worth $5bn+ with a static number of teams and TV rights deals getting bigger and bigger. I think it’s a great safe haven asset for them.
I understand the case for escalating valuations - my question is more so how definite life (5-10yr) funds rationalize making these investments and market them to LPs with no ability to control or dictate exit terms (assuming they are pref or minority equity investors in these deals, which seems to be the case because i dont think they are allowed to control teams)
I feel like it’s just like how you flip other stakes in huge illiquid assets, assuming you have conviction in the valuation?
Tag-along rights, secondary sales with universe being other MFs, rich ppl, and….yourself with a CV? It’s a different buyer universe but one where there’s still consistent deals happening that you can point to.
If you’re thinking about the Mavs situation where some interesting decisions were made….at the end of the day it’s a scarce asset and you do your dd lmao.
Makes sense, but seems like secondary sale to other funds is tougher in an industry where IPO seems like a non starter. And CVs likely the right answer but hard to convince LPs to pay 2/20 (or less) in an asset class with long hold period and likely lower return profile than elsewhere in PE landscape
CVs or sell to Saudi's once the major US leagues approve them for ownership.
celtics isn't sponsor underwritten
This is not true, sixth street apparently set to invest >$1B based on public reporting
Likely highly structured pref deals. Assuming any PE firm involved at this valuation has the ability to put back to the common ownership group at a defined valuation that equates to low-mid teens IRR.
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