This Day On The Street
Continue to site
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

Sports Turns Into Private Equity Playground

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 - Get Report), 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 - Get Report), 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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BX $31.03 -0.16%
CMCSA $61.71 0.50%
CVC $30.28 -0.31%
KKR $17.04 -0.29%
MSG $165.52 0.33%


Chart of I:DJI
DOW 17,819.00 +5.61 0.03%
S&P 500 2,091.73 +2.86 0.14%
NASDAQ 5,130.2280 +14.0850 0.28%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs