SportsInvest Newsflash (by Oakwell Sports Advisory)
Stay up-to-date with sports investment trends & events worldwide
Top Stories of the Week:
New Zealand Rugby and NZRPA boards approve partnership with Silver Lake
The New Zealand Rugby (NZR) Board and the New Zealand Rugby Players Association (NZRPA) Board have approved a partnership agreement between Silver Lake, NZR and the NZRPA, providing capital to invest in the game at all levels and the pursuit of new global opportunities enabled by digital technologies.
Under the terms of the agreement, which remains subject to ratification by the Provincial Unions and Māori Rugby Board, Silver Lake will invest NZ$200m (at a NZ$3.5bn valuation) in a new commercial entity that will house all revenue-generating assets of NZR, with additional co-investment of up to NZ$100m to be offered to New Zealand-based institutional investors later in 2022
Silver Lake, NZR and NZRPA will also establish “Global Rugby Opportunities” to invest together in rugby-related businesses outside of New Zealand.
At the conclusion of the additional co-investment, Silver Lake will own between 5.71-8.58% of NZR CommercialCo.
Saracens complete £32m takeover with Francois Pienaar among investors
Saracens’ £32m takeover by a consortium including World Cup-winning captain Francois Pienaar has been completed.
The Premiership club announced the takeover in October with Saracens owner Nigel Wray agreeing to sell his controlling stake in the club. A club statement said on Wednesday: “The board of Saracens Group Holdings Limited is pleased to announce the completion of the previously announced transaction regarding the refinancing of the group and the acquisition of a controlling stake in the group by Kimono House Limited.
“This follows the receipt of the various approvals required (including from the RFU, PRL and the London Borough of Barnet). The group includes Saracens Rugby Club, Saracens Mavericks Limited (the owner of the Saracens Mavericks netball team), and Saracens Copthall LLP (the owner of the StoneX Stadium). Kimono House is owned by a consortium of investors including Dominic Silvester, Neil Golding, Nick Leslau, Paul O’Shea, Francois Pienaar and Marco Masotti.”
Wray, who first invested in the club in 1995 and took full ownership in 2018, has been looking to reduce his stake for some time.
WSC Sports announces $100m in Series D funding
WSC Sports, the AI-powered highlights specialist, has confirmed a US$100m Series D funding round led by ION Crossover Partners (ICP). Existing investors, including Intel Capital, O. Tech and Dan Gilbert’s Detroit Venture Partners, also participated in WSC’s latest capital raise.
WSC said it plans to use the new funding to support ‘aggressive growth plans’ for 2022 and beyond, including a push into new territories and new sports. WSC added that it will also be seeking to integrate new features into the platform focused on areas such as betting and NFTs.
In addition, the company is set to recruit more than 150 new employees this year, both in Israel and its regional offices in New York, Sydney and London.
WSC has surpassed more than 200 global customers in 2021, with its rights holder clients seeking to automate, customise and scale up their digital content efforts. Last year, more than 3.4m highlight clips were created using the company’s AI-based platform – more than nine years’ worth of video. The company also new rolled out popular new tools, such as WSC Stories, which saw the firm’s clients produce more than 6,000 short clips that received close to 100 million views.
Football:
Private equity group from Singapore buys small second-tier Belgian club to launch global ambitions
Hiroyuki Ono and Singapore-based ACA Football Partners want to build a multi club ownership network with data analytics and capture the Asian market with an OTT platform.
In January, they acquired Belgian second-division outfit KMSK Deinze as their founding club.
ACA Football Partners are the seventh foreign investors in the Belgian second division.
Ono and ACA Football Partners are not the first investors with the plan of exploiting the huge market in football-mad Asia. The new owners promised to “position KMSK Deinze at the centre of their strategy, “to develop a unique business platform utilizing the competitive advantage of the multi-club ownership” and “build a global fanbase”.
Brazilian football aims to score investment as well as goals
Change is now on the cards in the spiritual home of o jogo bonito (the beautiful game), as a drive to professionalise the business side of the sport gains traction. Those pushing for reform in the $1bn-turnover industry point to the kind of commercial success achieved in major European leagues in recent decades.
The first proposed deal of its kind was unveiled towards the end of last year, when Ronaldo Luís Nazário de Lima, one of the greatest strikers of all time, announced plans to purchase 90% of his boyhood club Cruzeiro in the city of Belo Horizonte. The former superstar promised R$400m ($75m) of funding through his company Tara Sports for the once high-flying team, which was demoted from Brazil’s first division two years ago amid a corruption scandal and mounting debts.
American businessman John Textor, a major shareholder in England’s Crystal Palace FC, then signed a binding contract to acquire 90% of Botafogo last month, pledging to pour R$400mn into the Rio de Janeiro outfit. Fans celebrated in the street after the approval of the sale.
There is also potential to bring Brazil’s clubs to an international audience, argued Textor. “Most of the world hasn’t heard of Corinthians, Botafogo, Palmeiras — these just aren’t brands. Well, why not?” he asked.
Angel City adds new investors in Series A financing
The National Women’s Soccer League’s Angel City have closed a Series A financing round, which included investment firm Seven Seven Six, Initialized Capital and several new backers. The new backers included Gabrielle Union, Christina Aguilera, Jay Shetty, Shawn Johnson East and former NFL player Andrew East.
In addition, Rachel Zoe and Rodger Berman are investing via venture capital firm Rachel Zoe Ventures. Zoe’s company Curateur is also an Angel City sponsor. The amount raised was not disclosed. Founding investors include Natalie Portman, Jessica Chastain and Serena Williams, whose husband Alexis Ohanian is lead Angel City investor and Reddit chairman.
Other names involved in the club are Billie Jean King, Candace Parker, Eva Longoria, Jessica Garner and venture capitalists Michael Sidgmore, Jess Lee, Lydia Jett, Aaron Wong, Daniel Karubian and Megan Hyatt.
The entrepreneur claimed to be heavily interested in completing a takeover at the Stadium of Light late in 2020, suggesting that he had submitted a bid of £45m to buy the Black Cats from Stewart Donald.
However, his bid failed and the club passed hands to Kyril Louis-Dreyfus.
This week, though, Louis-Dreyfus admitted to Sunderland supporters that he does not own a majority of the club’s shares.
Pressure had been building on the Black Cats’ Chairman to clarify the ownership structure at the club, having told a supporters’ collective meeting late last year that he was unable to do so due to confidentiality agreements.
The owners of clubs such as Southampton, West Bromwich and Inter Milan are all reportedly negotiating their exit as a sign of a clear tendency: Chinese investors are pulling out of European football.
Last week, the broadcast feed for matches from Italian football's Serie A was pulled from PP Sports, the Chinese streaming platform owned by Suning Holdings. The reason was that Chinese-owned PP Sports had failed to make a payment to agency IMG, who acquired the rights to the competition in 2017.
"Things have changed dramatically, and the Chinese government is now expecting those involved in overseas investments to invest at home instead," says Emlyon Business School Professor Simon Chadwick.
North America:
Mitchell & Ness sold to Fanatics, Jay-Z and other investors
Fanatics, the country’s largest licensed sports merchandise retailer, has teamed with some big names — Jay-Z, Maverick Carter, Meek Mill, the D’Amelio family and Lil Baby — to buy the business, officially called Mitchell & Ness Nostalgia Co., from Juggernaut Capital Partners. Terms were not disclosed.
Mitchell & Ness offers vintage product for Major League Baseball, the National Football League, the National Basketball Association, Major League Soccer and a number of NCAA universities. It also produces licensed lifestyle product, street fashion apparel and headwear.
In early 2020, the NBA made a rule change that went mostly unnoticed but had significant implications. The league would now allow firms to buy in to its teams, no longer restricting ownership stakes to just individuals.
The value of NBA franchises had been on such a fast upward trajectory for nearly a decade that it was difficult for some minority owners to sell their shares. The usual market was harder to tap since new investors had to find increasingly larger amounts of capital to buy a piece of a team that included no control, little fanfare and could sometimes be seen as largely nothing more than a multi-million dollar way to get better tickets.
The influx of private equity into the NBA could presage another leap in franchise values. They have gone up by several magnitudes over the past two decades. In 2002, Forbes listed the Lakers as the most expensive team in the NBA, valuing them at $403m. Last year, the franchise was reportedly valued at approximately $5bn in a transaction for a 27% stake in the team.
Rugby Union:
RFU receives £90m cash boost as part of CVC’s Six Nations stake
The RFU received a major financial boost with an injection of £90m as part of the deal that saw private equity firm CVC take a 1/7th stake in the Six Nations.
The CVC money will be spread over five years and will be used to maintain support for the community and professional game, rather than pay off debts in the short-term.
The deal, completed last year, will see CVC invest up to £365m in Six Nations Rugby over the next 5 years.
The RFU is likely to focus investment on assets around its England teams to further increase income, including the development of Twickenham, digital platforms and growing the women’s game.
Some of the cash will also be used to rebuild the RFU’s reserves.
Media:
Disney sells Fox Sports channels to Mediapro in Argentina
The Walt Disney Company has agreed to sell its Fox Sports channels in Argentina to the Mediapro agency in compliance with requirements outlined by the Comisión Nacional de Defensa de la Competencia (CNDC), the country’s competition regulatory agency.
In a statement, Disney confirmed that it had agreed to sell the Fox Sports channels, along with “all the rights corresponding to the content that was transmitted” by the channels at the time of the merger, as it was required to do so by the CNDC.
Mediapro has an existing presence in Argentina, where it employees more than 600 people across its audiovisual content production business.
CME breaks into new market with RTL Croatia takeover
Media group Central European Media Enterprises has grown its presence in southern Europe and broken into a new Balkan market with an agreement to acquire RTL Croatia.
RTL has announced that the €50m deal is expected to close in the second quarter of this year and added that RTL will benefit from royalties under a long-term licensing agreement with CME. The latter is owned by Prague-based investment group PPF, which completed its acquisition of the media group in 2020.
RTL Croatia operates three free-to-air channels in the country, of which RTL 2 shows sports, alongside classic movies and series.
Metaverse:
Athletes and celebs pay $2.9m for islands in metaverse
Former world No. 1 tennis player Ana Ivanovic and Paris Saint-Germain midfielder Marco Verratti are among several sports stars to buy virtual islands in The Sandbox, the blockchain-based virtual world computer game. Islands were also bought by Bayern Munich winger Kingsley Coman, Swiss tennis player Stan Wawrinka and Dan Holzmann, co-owner of the Swiss soccer club FC Basel.
Exclusible, an NFT marketplace that works with luxury brands, sold a total of 25 private islands in The Sandbox for a combined 910 ETH—which currently equals about $2.9m. Exclusible limited sales of its last available virtual private islands to influencers with at least 1 million social media followers. Former Victoria’s Secret model Sara Sampaio was among those to buy the digital land, as well as crypto trading platform eToro, which ran an ad during Super Bowl LVI.
Health & Fitness:
New Peloton CEO does not believe company will be sold
New Peloton chief executive Barry McCarthy has rejected speculation the company could be sold in the near future, adding that he was ready to oversee a strategic shift and expansion programme that will reverse the connected fitness specialist’s fortunes.
McCarthy told the Financial Times that he had no intention of moving from California to New York just to oversee a sale and that he believed in the market opportunity ahead of Peloton.
Apparel:
JD Sports and Footasylum fined £5m for sharing information after merger blocked
JD Sports and Footasylum have been fined almost £5m by the UK’s competition regulator for sharing commercially sensitive information, including during one meeting in a car park in Greater Manchester last year.
The meetings followed a decision in May last year by the Competition and Markets Authority to block a combination of the two companies. On Monday, the regulator said there was a “black hole” surrounding discussions between the groups, as some phone records relating to meetings between JD Sports executive chair Peter Cowgill and Footasylum chief executive Barry Bown had been deleted.
JD Sports shouldered the bulk of the £4.68m penalty for rule breaches concerning the tie-up. Its share price was down almost 5% in morning trading.
Private Equity & Venture Capital:
Gerard Piqué’s Kosmos launches new sports projects investment company
Sports investment firm Kosmos has launched a new company focusing on sports projects.
Kosmos Global Capital, which reportedly began operating on 18th January with a share capital of €3,000, is headquartered in Barcelona. Kerad Holding, the investment company of Spanish star Gerard Piqué, will serve as sole partner. Piqué, who set up Kosmos, is joined by his father Joan as joint administrators.
Kosmos Global Capital will focus on ‘the acquisition, possession and administration of all kinds of securities, company shares or any other title or sign representative of participatory or credit rights of other companies’.
Sports Loft invests in Satisfi Labs, Fevo and Slate
London-based sports technology investor Sports Loft has announced new investments in AI chatbot provider Satisfi Labs, soccer commerce platform Fevo and content management app Slate. Sports Loft was founded in 2019 by Charlie Greenwood, the former head of strategic planning for Nike’s U.K. operations.
The investments came as part of Satisfi Labs’ Series A round, Fevo’s Series C round and Slate’s seed funding round. Google and Major League Baseball previously invested in Satisfi Labs, whose chatbots are used across MLB, NFL, NBA, NASCAR and NHL teams to share information with fans on gamedays.
Fevo’s Series C round was valued at $36.5m and included funding from Drive by DraftKings and HBSE Ventures, among other investors. Slate’s app to streamline social media content creation is used by teams such as the Golden State Warriors, Tottenham Hotspur, Green Bay Packers and Minnesota Vikings.
Arctos adding to investment portfolio with Elevate Sports minority stake
Private equity firm Arctos Sports Partners is in advanced talks to take a minority stake in the Elevate Sports Ventures consultancy.
The investment will see Arctos join Harris Blitzer Sports & Entertainment (HBSE), the National Football League’s (NFL) San Francisco 49ers and the CAA Sports agency as investors in Elevate.
The trio established the sports consultancy firm in 2018, which has held strategic partnerships with venue development company Oak View Group (OVG) and entertainment firm Live Nation since June of that year.
Esports, Gaming, & Fantasy:
Kairos Group acquires Horizon Union
Gaming media company Kairos Group has acquired Manchester-based gaming and esports organisation Horizon Union.
As a result, the organisation will become a part of the Kairos Group, a company that includes esports and gaming agency Kairos Media and Kairos Ventures, as well as Turopium Sports and Entertainment.
Data & Analytics:
Porsche and Sharp Alpha Advisors invest in motorsports Data Startup Griiip
Motorsports data company Griiip has closed a seed funding round led by Sharp Alpha Advisors and Porsche Ventures. Griiip’s sensor-based hardware called RedBox collects real-time data from race cars to support fan engagement offerings such as broadcast graphics and fantasy and betting applications.
Griiip, based in Israel, aims to work with the world’s top racing leagues, having already partnered with Europe’s DTM series. The company can track real-time data on a driver’s stress levels, a vehicle’s battery or engine status predicted lap times or how the length of a pitstop impacts a driver’s chance of winning.
Porsche Ventures is the venture capital arm of Porsche, which has an electric car in Formula E and has been rumored to be considering a return to Formula 1. Sharp Alpha Advisors launched a $10m fund in October to invest in sports betting related startups.
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