Buyouts Insider quotes Darren Bailey on private equity's increasing interest in sports

Private equity investment in sport is nothing new but, according to an article by Buyouts Insider, the past six years have seen this trend dramatically accelerate. The publication reports that a "watershed moment came in 2019 when Major League Baseball became the first North American sports league to permit private equity investment. Others soon followed with the National Football League being the last to do so in 2024, meaning all five major North American sports leagues are now open for private equity investment."

The piece goes onto explain that North America’s sports brands have generated millions of fans around the world due to their thrilling entertainment, but as business models these are also winning fans among private equity firms. 

Darren Bailey, Consultant in our Commercial team, comments in the article, providing his views on franchises’­ quick expansion into global audiences:

These additional revenue opportunities are being supplemented by augmenting the live sports offering with entertainment and news services via documentaries, behind the scenes access and athlete storytelling creating fresh engaging content to drive audiences toward the sport and teams. Most vividly illustrated in the global success of Drive to Survive, which is widely attributed with boosting F1 audiences and commercial revenues across the world.

Buyouts Insider then suggests that the way in which private equity firms access North American franchises is different compared to others. Darren goes on to draw comparisons between Europe, where there is limited regulation around private equity involvement, whereas in the US this is different. He explains:

Allowing private equity investment under the NFL policy creates more liquidity and options to secure funds for stadium improvement, player spend and fan engagement activity whilst retaining broadly the same sports model with limited changes to the end product,” says Bailey. “It is likely that some owners/fans in Europe are looking on enviously at the smooth and controlled transition the NFL has managed with private equity which in many ways was only necessary because of its success in helping grow the valuations of its teams to levels which most investors could simply not afford, trapping existing owners and creating succession headaches.

Read the full article in Buyouts Insider here (subscription required).