Private equity investments in the sports, media and entertainment industries caught fire in 2021 as firms looked to add sports franchise stakes, music catalogs and Hollywood-backed companies to their portfolios.
As highlighted in our latest US PE Breakdown, multiple firms focused on scoring minority stakes in sports teams last year as franchises’ valuations soared.
Dallas-based Arctos Sports Partners, which announced it had closed the largest-ever first-time US PE fund in October 2021 at $3 billion, secured minority stakes in multiple NBA teams. Those included a roughly 5% stake in the Golden State Warriors for around $275 million and a 17% stake in the Sacramento Kings at a $1.8 billion valuation.
Beyond the NBA, Arctos has deployed significant capital across at least 12 other investments, including the purchase of a stake in the NHL’s Tampa Bay Lightning.
Dyal Capital Partners went on an NBA tear of its own, acquiring a nearly 5% stake in the Phoenix Suns at a $1.55 billion valuation and a nearly 5% stake in the Kings. In June 2021, Sixth Street Partners acquired a 30% stake in the San Antonio Spurs alongside Michael Dell, with Sixth Street owning 20% and Dell the remaining 10%.
Sports investing has also cemented itself as a global trend. Luxembourg-based CVC Capital Partners purchased an expansion cricket franchise in the Indian Premier League for $736 million in October, and injected $3.2 billion into Spain’s La Liga soccer league.
Private equity firms were also in search of thriving media companies in 2021. In August, Next Generation Media Co.—Blackstone‘s newly formed media business—announced a $900 million buyout of Hello Sunshine, the production company founded by Reese Witherspoon.
Next Generation followed up that deal with a pact to buy Moonbug Entertainment, a children’s entertainment company. That deal could reportedly value the business at $3 billion or more.
Apollo Global Management closed a $5 billion deal for Yahoo’s New York news division in September. Thomas H. Lee Partners acquired BazaarVoice—a provider of outsourced technology, community management, analytics and syndication services—for $1.75 billion in March.
Music catalog deals continued to be a hot ticket item. Since late 2020, Universal Music Group paid nearly $400 million for Bob Dylan’s song catalog, and Sony Music Group, with some financing from Eldridge Industries, bought Bruce Springsteen’s masters for $500 million in the largest deal to date. Shamrock Capital paid $300 million for the master recordings of Taylor Swift’s first six albums.
In March, KKR and BMG announced a partnership to acquire music rights. In December, the investing duo acquired the music catalog of American rock band ZZ Top, in a deal that included the band’s publishing catalog and their income from recorded royalties and performance royalties. This month, KKR and BMG also acquired the music catalog of singer-songwriter John Legend.
Related read: 2021 Annual US PE Breakdown
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