Buyout firms must beware the unique legal, regulatory, and commercial issues that can complicate sports transactions and impact returns.

By Patrick Mitchell, Alex McCarney, Stewart Robinson, Catherine Campbell, Tom Evans, and David Walker

Private equity interest in sports assets has grown over the last few years, with investments in teams, leagues, and other members of the sports ecosystem. Sports investments by sponsors, including CVC’s US$8 billion sale of Formula One racing in 2017, have underlined the strong returns available.

Today, the COVID-19 crisis, with the stresses that it has placed on sports media, sponsorship, and match-day revenue streams, has created new opportunities for investors — and interest is accelerating. Financial sponsors are continuing to seek out opportunities. Firms have invested in, or are in the process of investing in, a range of sports, from martial arts to football, and rights holders are signalling that they would welcome investment to see them through and beyond the current crisis.