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

In the 2009 sale of the Chicago Cubs by the then-bankrupt Tribune Company, the $845 million sale to investnements mogul Tom Ricketts was bolstered by the Cubs 20% stake Comcast SportsNet Chicago.

The value of an independent network in bargaining with a cable provider was also highlighted in the spat between Time Warner Cable and MSG, as a Jeremy Lin-inspired Knicks winning streak brought Linsanity to a stalled programming negotiation.

For more on the importance of sports networks, see why the 2012 Jeremy Lin Knicks blackout began with Cablevision's (CVC - Get Report) spin of MSG in 2010. Instead of retaining MSG under its cable network umbrella, Cablevision decided on a MSG shareholder spinoff that kept a sizeable stake in the New York Knicks and Rangers in the hands of the company's owners the Dolan family.

Already private equity investors are whetting their appetite for sports teams and likely for more than just the thrill of the game. In July 2011, Apollo Global Management (APO) and Blackstone (BX - Get Report) Joshua Harris and David S. Blitzer bought the NBA's Philadelphia 76'ers for $280 million from Comcast, in a deal that didn't include the team's arena.

Comcast still retains control of the Philadelphia Flyers.

The 76'ers also have long-term programming contract that lowers its still significant media value. "I think for Josh or any buyer these days, it's all about the media rights," said Scott Milleisen, a managing director of JPMorgan's Private Bank in a Forbes Sports Money interview.

A month earlier, Tom Gores, the head of Platinum Equity bought the Detroit Pistons for $325 million, in a deal that included the team's Palace of Auburn Hills arena. In a Tuesday ACG conference on sports M&A, Bradley Rangell of Citi Private Bank noted that for Platinum Equity, the Pistons deal represented a "strategic fit" with its many other corporate investments.

Meanwhile, the Toronto Raptors were owned by private pension fund The Ontario Teachers' Pension Plan, until a $1.3 billion sale of the fund's 80% stake in a sports holding company in 2011.

The bulk of the Boston Celtics ownership group consists of private equity executives from Bain Capital, Silver Lake Partners and Accel Partners.

So what would the problem to a increasing private equity involvement be? For one thing, a profit mindset may lead to increased monetization efforts, which could increase in-stadium and T.V. sports viewing costs. Secondly, for-profit owners may favor a team's profit and loss statement over wins and losses. Another question is whether investment funds would look at ownership as a quick flip investment.
2 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 $31.71 1.54%
CMCSA $61.75 1.46%
CVC $30.58 0.26%
KKR $16.92 0.06%
MSG $164.70 1.38%


Chart of I:DJI
DOW 17,888.35 +168.43 0.95%
S&P 500 2,102.63 +22.22 1.07%
NASDAQ 5,156.3060 +47.64 0.93%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs