This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sports Turns Into Private Equity Playground

Stocks in this article: MSG KKR BX CVC CMCSA

NEW YORK ( TheStreet) -- After taking on Corporate America, private equity firms are set to storm the gate of sports teams as owning a sports team becomes less of a pastime for the mega rich.

Already, a flurry of team sales to private equity titans shows an increasing interest by buyout investors in the sports world. With a flurry of ownership changes in the NBA to go with the bankruptcy sale of the Los Angeles Dodgers and the New York Mets woes luring financiers, the question now is whether sports teams will be seen as a bona-fide investment.

Barbarians are at the ticket gate of a stadium near you

Watch for a resolution to the L.A. Dodgers bankruptcy and the sale of the NHL's St. Louis Blues as a leading indicators on how investment firms will enter the sports ownership fray in what they see as profitable or cash generating assets. That would be counter to the traditional reason for owning a team: fan-fever, social graces or simple vanity.

In the Dodgers sweepstakes, private equity firms like KKR (KKR), Thomas H. Lee and Providence Equity Partners have emerged as prospective buyers, but without a primary interest in the National League ballclub. Instead, the private equity investors may be eyeing the Dodgers sports programming business, which have a similar value as Madison Square Garden's (MSG) MSG Networks, the New York Yankee-owned YES Network and the Boston Red Sock-run New England Sports & Entertainment Network.

In February, Forbes reported that the private equity firms were looking at joining one of the remaining groups bidding on the Dodgers, with the possibility of contributing up to $300 million in an overall acquisition that is likely to fetch $1.5 billion. Those reports indicated that the buyout firms would be interested in the Dodgers sports programming rights, which could pave the way for the creation of an independent sports network.

A BusinessWeek feature indicated that many of the Dodgers interested buyers are targeting the baseball teams distribution rights, which could net a more than $3 billion T.V. deal. Those prospective buyers include Time Warner Cable (TWC) and Comcast (CMCSA), in addition to a consortium led by Leo Hindery of the YES Network that includes private equity fund Colony Capital, according to BusinessWeek.

If Hindery's consortium were to win, they could attempt to build an independent network like YES that would put it in a strong negotiating stance with a cable systems looking to distribute games.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs