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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At my office (Big 4 in Europe), a sort of sport service line is taking shape but mostly focused on football (soccer).
Many investment firms in the last approx. 5 years started looking at sport companies hence there are some M&A processes, LBO/debt advisory and strategy/business plan engagements, also involving BBs.
In my office in particular M&A team is managing a couple of sell-side mandates of teams playing in the national first series.
I think this is a sort of trend coming from the globalization/capital opening/PE growing interest and, at least in Europe, general financial difficulties of current entrepreneurs owning these teams.
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.
This makes a ton of sense. It's not like buyers are looking at an EBITDA multiple lol
On this note, some BAML marketing materials for the Clippers' sale were uploaded online. Worth a look for anyone interested in seeing how Sports deals are looked at
GS has a strong Sports specialized group within the IBD group. I’m not sure but I think they facilitated the sale of a few European soccer teams.
I heard Goldman is doing FaZe clans IPO
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