Global Sport Group Initiates €2.7bn Debt Process in Bid for Expansion
Global Sport Group (GSG), an investment vehicle owned by CVC Capital Partners, has commenced a €2.7bn (£2.3bn) debt-raising initiative to further bolster its standing in the global sports market. The move is aimed at enabling GSG to expand its portfolio, which includes significant holdings like Six Nations Rugby.
Debt-raising Strategy
Informed sources have disclosed that formal discussions with investors began earlier this week. This debt deal is intended to provide substantial financial resources for CVC, allowing it to pursue additional sports-related acquisitions worldwide, as it seeks to establish an impressive collection of sports assets.
Goldman Sachs is overseeing the debt-raising process, which runs concurrently with ongoing dialogues with potential equity capital providers, including prominent firms like Ares Management and Bain Capital.
Funding Partnerships
CVC is engaging with a range of debt funders, including HPS, a global credit firm under the Blackrock umbrella, the world’s largest asset manager. This diverse approach aims to secure the necessary capital to transform GSG into a formidable player in the sports investment sector.
Diverse Portfolio
GSG has established a broad portfolio, featuring stakes in various sports entities such as the women’s professional tennis tour, Premiership Rugby, and top-tier football leagues in France and Spain. Notably, it also holds an investment in an Indian Premier League cricket franchise, reflecting the rising interest among investors in cricket.
Long-term Ambitions
The funds raised will not only allow CVC to maintain its stake in existing assets but may also facilitate the potential sale of a minority share in GSG or the pursuit of an initial public offering on an international stock exchange in the future.
Previous Achievements
CVC has notably profited from its involvement in Formula One, which remains one of the most lucrative ventures in sports history. Its investment in media rights for Spain’s La Liga is anticipated to yield good returns, despite facing challenges in France amidst financial instability for broadcasters.
By supporting global sports entities, CVC aims to enhance their commercial viability through innovative media and sponsorship agreements, adapting to shifts in media consumption trends.
Challenges and Future Prospects
In the rugby domain, CVC’s stake in Premiership Rugby, acquired in 2019, was affected by the pandemic, which led to the financial turmoil of several teams in the league. Despite this, CVC retains a 27% interest in Premiership Rugby, with its assets remaining independent while benefiting from a centralized investment strategy.
In addition, CVC is linked to a potential bid for one of the new NBA basketball franchises set to be sold in the coming months, with formal discussions expected to commence soon.
Background
The global sports investment sector has gained significant traction recently, with major firms like Ares and Silver Lake Partners pouring considerable funds into various teams and leagues. GSG’s latest financial manoeuvre marks a keen interest in enhancing its portfolio at a time when private capital remains eager to invest in lucrative sports properties.
CVC has refrained from commenting on the latest developments, leaving industry observers awaiting further updates as the debt-raising process unfolds.
Source: Original Article
