Tampa Bay Lightning close to deal for minority private equity stake
The Tampa Bay Lightning are on the verge of closing a deal to sell a minority stake to a private equity firm, according to the team owner and a person familiar with the matter, making the National Hockey League the last association professional sportswoman to embrace institutional investing as franchise valuations skyrocket. .
Hedge fund manager Jeff Vinik, majority owner of the reigning Stanley Cup champions, told the Financial Times in a statement he was “in talks to sell a minority position” and would retain control of the company mother of the team, Vinik Sports Group, “if a minority sale is finalized”.
The NHL board of governors voted on Thursday to approve the sale of Lightning’s stake to sports-focused private equity firm Arctos Sports Partners, a person familiar with the matter said, adding that the transaction is still subject to review. conditions.
The NHL and Arctos declined to comment.
The Lightning and NHL’s decision to welcome private capital highlights a shift in the way North American sports leagues are owned, as Wall Street increasingly views sports teams as investment property.
The National Football League is now the only major men’s professional sports competition in the United States without institutional ownership provisions. Major League Baseball, National Basketball Association, and Major League Soccer have all changed their ownership rules since spring 2019.
Since then, a cottage industry of private equity firms and institutional investors – including Arctos and RedBird Capital Partners, as well as Dyal Capital and asset manager Ares Management – have raised funds and initiated a mix of investments. in debt and equity in teams across the continent. .
The rules of the US professional sports leagues generally require that institutional holdings in clubs be held passively, with caps for individual funds and aggregate holdings for each club.
Since the turn of this century, sports franchises have appreciated faster than many other financial benchmarks, including the S&P 500 stock index.
In June, tech entrepreneur Michael Dell and private equity group Sixth Street Partners reached a deal for a combined 30% stake in the San Antonio Spurs basketball, valuing the Texas franchise at $ 1.83 billion. dollars, according to people familiar with the matter. The team is majority owned by billionaire Holt family, who bought Spurs for $ 76 million in 1996, according to Forbes.
Other franchises, including Utah Jazz basketball and New York Mets baseball, sold at $ 1.66 billion and $ 2.4 billion, respectively, in the past year.
Arctos has raised over $ 2.1 billion since April last year for its first sports investment fund, with total assets under management of over $ 3 billion and holdings in the Golden State Warriors and the Sacramento Kings of basketball in October.
Also on Thursday, the NHL also approved the sale of the majority stake in the Pittsburgh Penguins franchise to Fenway Sports Group, the holding company behind English Premier League club Liverpool FC and the Boston Red Sox baseball, which includes itself- even minority institutional investments from Arctos and RedBird.
The Financial Times previously reported that the Penguins were valued at over $ 850 million, although the NHL said in a statement that “the purchase remains subject to negotiation and documentation execution before the close of the transaction”.
The NHL, which operates in the United States and Canada, earlier this year signed a new seven-year media rights deal with WarnerMedia’s Turner Sports worth $ 225 million for the season.
Scoreboard is the Financial Times’ must-have new weekly sports affairs briefing, where you’ll find the best analysis of financial issues affecting clubs, franchises, owners, investors and media groups across the global industry. Register here.