Latest news with #Arctos
Yahoo
17 hours ago
- Business
- Yahoo
Club Sportico: The NFL's Lesson in Supply and Demand
This story originally appeared in Club Sportico, which is Sportico's separate community newsletter. Join the club here. Last summer, following years of internal debate, the NFL joined the other major U.S. leagues in allowing private equity funds to invest in teams. The thinking was simple: with the average franchise worth $6+ billion, the amount of wealthy individuals willing/able to buy small, passive stakes was shrinking. Funds would introduce more buyers, and more demand would mean higher valuations. More from Sporticast 455: The $7M Takeover of a Winter Olympics Cult Favorite Charles Woodson Faces Tom Brady Again, Now as Browns Owner As Live Sports Surge, Scripted Series Fade From Broadcast TV Twelve months later, the shift has had the exact desired effect. Teams are selling minority stakes at record valuations. However, most of the buyers have been wealthy individuals, not PE funds. The NFL did unlock a new pool of investors, just not the one it expected. Rather than needing to juice demand, it turns out NFL owners just needed to flood the market with supply. Here are some of the more recent deals: Buffalo Bills 🐃: Nine individuals and one fund (Arctos) bought about 20% total at a $5.8 billion valuation. Miami Dolphins 🐬: Two individuals and one fund (Ares) bought 13% at an $8.1 billion valuation. Los Angeles Chargers ⚡: One individual bought 27% at $4 billion valuation. A fund (Arctos) bought 8%, valuation unclear. San Francisco 49ers ⛏️: Three families bought 6.2% at an $8.6 billion valuation. Philadelphia Eagles 🦅: Two families bought 8% at an $8.3 billion valuation. Cleveland Browns 🐶: One individual bought a very tiny stake, valuation unclear. New York Giants 🔵: In market right now, but looking to sell 10% to small group of individuals. We count 21 new NFL minority investors in the last half year, and 18 of them are individuals or families. Here's what happened… Institutional investors like sports funds are looking to make money off their investments—they want to capture management fees and sell their team stakes at a later date for a hefty profit. Individuals, on the other hand, buy equity for a bunch of different reasons. It's an ego thing, a vanity thing, a fan thing or a tidy tax benefit. Sometimes it's all of the above. Either way, individual buyers are way less price-sensitive than institutional investors. How far apart are they? The 49ers ⛏️ were valued at $8.6 billion in their recent LP (limited partner) sale. I was told this week that one of the initial bids from a prominent PE fund was more than $1.5 billion lower. It seems possible that the NFL didn't realize how much interest still existed from individuals because teams simply weren't testing the market that much. NFL stakes historically don't sell at the rate of some other leagues. Once the institutional rules were changed, however, many teams rushed to capitalize on the new upside. What they found, instead of funds willing to pay top dollar, was a new group of individuals willing to open their wallets. There now appears to be two separate markets for NFL minority stakes. There's the market for individuals, and the market for funds. Where your team goes likely depends on a number of different factors. Do they want the operational expertise that a group like Arctos offers? Is dollar total the most important factor? Are they willing to roll the reputational dice with a human? And maybe most importantly, is your team willing to perform the entertainment duties needed to court these individual investors? Joe Billionaire may be willing to invest in the Jaguars 🐱 at a $7 billion valuation, but the Jaguars also have to be willing to give him a parking spot, tickets, access to the locker room and team plane, and maybe a Super Bowl ring. Sixth Street or Apollo don't need all of that. One other factor here: the NFL rules state that teams can only sell 10% of their equity to PE funds. That's compared to 30% in the NBA, MLB, NHL and MLS. The low maximum—plus the league's unique demand to retain the right to compel sales in certain situations—has also contributed to the trickle in PE deals. If I were a betting man, I would expect the league to increase that 10% limit in the near future. It's clear funds aren't competing with individuals on the small stakes. But they likely would on the bigger ones. ⚡ Take: All this talk of investors and stakes reminds me of one of my all-time favorite Sportico graphics, hand-drawn division. The story of sports team sales is told below, in traced magic marker and multiple shades of red (an Eben specialty), likely with the help of tools I haven't seen since 2nd grade. Best of Most Expensive Sports Memorabilia and Collectibles in History The 100 Most Valuable Sports Teams in the World NFL Private Equity Ownership Rules: PE Can Now Own Stakes in Teams
CNBC
29-05-2025
- Business
- CNBC
CNBC Sport: Why one prominent investor thinks team valuations are way too high
A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox. It took nine months, but I finally found a high-profile investor who says professional sports team valuations are too high. This week's "On The Record" guest is Gerry Cardinale , the founder of RedBird Capital Partners. RedBird is a private equity firm that focuses on media and sports investments. RedBird has been the controlling owner of AC Milan, the Italian professional football (soccer) club, since 2022. It's also an investor in Skydance Media and one of the driving forces behind Skydance's still-pending merger with Paramount Global. Cardinale says he's "pencils down" on all major U.S. sports team acquisitions right now as valuations soar. "If you're a student of history, you know that always going up is not is not a great arbiter for making an investment," said Cardinale. "There needs to be some normalization in what I see as a bit of an asset bubble." Since we started this newsletter in September, I've spoken with many people who have touted the benefits of sports team ownership. They've pointed out investing in a franchise tends to be recession proof. The assets are scarce and appeal to rich people's vanity – a constant in all macroeconomic environments. The values are largely tied to media rights deals, which keep going up and up , at least for the big U.S. sports. The influx of private equity owners has added potential bidders, which boosts prices. The private equity firm Arctos Partners created an index with the Ross School of Business at the University of Michigan that tracks team transactions over the past 60 years. The results are clear: team valuations have risen for six decades in a row, including a stunning jump in recent years. The phrase "up and to the right" has never been more accurate. Arctos is one of the firms that's now allowed to buy a piece of a National Football League team – a rule that changed last year. Arctos quickly acquired a 10% stake in the Buffalo Bills. Ares Management, another authorized PE firm, has bought a 10% stake in the Miami Dolphins. RedBird isn't on the NFL's list of accepted private equity limited owners, but Cardinale told me he's uninterested in buying a minority stake in any major U.S. team right now. "I don't think that's a great investment," Cardinale said. "I want to have an involvement, a partnership, in the actual governance, in the underwriting of the business plan." A 10% ownership stake gives firms little control over day-to-day team operations. Minority investments come with no voting rights. Cardinale told me one of the major red flags for team ownership is a lack of generally accepted equity research for the asset class. Almost all sports teams aren't publicly traded. That has limited the insight into cash flow projections for how they'll perform. He noted Forbes Magazine and CNBC Sport's team valuations (led by our Michael Ozanian ) are the primary way investors research valuations given the lack of options. Cardinale says he's more interested in being the majority owner of a U.S. sports team one day – just not at today's prices. "I don't like the entry prices right now, because the underlying business plans are not there to really pay for it, and it relies on a certain assumption on media rights trajectory," he said. Cardinale noted that while NBA and NFL media rights have soared for decades, the question will become "the slope of the curve" for future deals. The NFL can opt out of its current media rights deal after the 2029-30 season. The NBA has its TV deal locked up until the end of the 2036-37 season. He predicted we'll see rights payments fall for sports with lower ratings – though perhaps not Major League Baseball. Cardinale is invested in New England Sports Network (NESN), which carries local Boston Red Sox games, through RedBird's minority stake in Fenway Sports Group. RedBird is also a minority owner in the YES Network, which owns the New York Yankees' local rights. That puts Cardinale in an unusually strong position to help dictate the future of local MLB rights. MLB Commissioner Rob Manfred has been vocal about his desire to take back local rights from regional sports networks in 2028 to sell a new nationalized product. Manfred will need buy-in from the big-market clubs like the Red Sox and the Yankees, whose RSNs bring in tens of millions more in annual revenue than those of smaller markets. Cardinale said one idea being discussed is to form a new company that could own local rights and negotiate with distributors. "The challenge baseball always has is there's a subtle tension between the big markets and the small markets. They both need each other," Cardinale said. "I think that baseball will do very well having groups like the YES Network and NESN – the Yankees, the Red Sox – and there are others like the Cubs and LA [Dodgers] anchor what ultimately will be a centralized media company." At this point, Cardinale's idea is hypothetical. MLB has talked to many people about different plans for regional games, according to people familiar with the league's conversations. A company that controls media but grants different amounts of equity in the venture to clubs isn't part of the league's current thinking, the people said. Still, Cardinale points out that teams should think of themselves as their own live entertainment entities and that there would be clear value in a company that could see distribution rights to all games at a national level. An MLB spokesperson declined to comment. On the record With RedBird Capital Partners founder Gerry Cardinale ... I spoke with Cardinale about several of RedBird's investments, including the UFL – that's the name of the combined USFL-XFL spring football league, which came together last year. I gave Cardinale an impassioned plea for the UFL to rebrand itself as an NFL developmental league that could service players such as Trey Lance , a quarterback who desperately needs live reps but can't get them because there's no forum for him to play what essentially should be minor-league football. The NBA has the G League, and the MLB and NHL have minor league affiliated clubs that offer the ability to develop talent for major league teams. The NFL doesn't have this same system, and the UFL could be that … Watch the entire interview here . Or listen to it here and follow the CNBC Sport podcast if you prefer the audio version. And if you go the audio route, a bonus: I also discuss the week's biggest sports and media news including my thoughts on Cardinale's interview with my colleague Lillian Rizzo . CNBC Sport highlight reel The best of CNBC Sport from the past week: One of those stories I talked about with Lillian was her report that high school sports at PBS stations are at risk with potential federal funding cuts. You can read that story right here. It's been a rough go recently for apparel companies, but the Swiss brand On is slowly gaining market share at the expense of Nike and Adidas, reports CNBC's Merritt Enright . CNBC contributor Karen Finerman joined "Fast Money" to talk about her investment, alongside Alibaba founder Jack Ma and supermodel Karlie Kloss , in the WNBA's New York Liberty, valuing the team at about $450 million. A CNBC Sport exclusive: Private equity firm Valeas Capital has acquired a majority stake in TicketManager, a company that specializes in managing corporate ticket sales, for $110 million. Have you heard of Hyrox? It's a series of fitness races that are drawing hundreds of thousands of athletes — both professional and amateur — and also more than $100 million in revenue. CNBC's Brandon Gomez has the details. The big number: 7.05 million A mammoth ratings number for Sunday's Indianapolis 500 is a clear win for Fox. The broadcast network took the TV rights from NBC beginning this year. Last year's race on NBC drew 5.02 million viewers. This year's race had the biggest TV audience for the event in 17 years. Quote of the week "It would be extremely prejudicial to Disney for Connolly to breach the contract which he negotiated just a few months ago and switch teams when Disney is working on a new licensing deal with the company that is trying to poach him." – Disney has filed a breach of contract lawsuit against YouTube for poaching veteran ESPN executive Justin Connolly . YouTube is making Connolly the steamer's global head of media and sports. Disney claims YouTube knew Connolly was under contract but offered a job to him anyway and "induced Connolly to breach the Employment Agreement," at a time when Connolly was working on a new licensing agreement between Disney and YouTube. "Connolly has intimate knowledge of Disney's other distribution deals, the financial details concerning Disney's content being licensed to YouTube, and Disney's negotiation strategies, both in general and in particular with respect to YouTube," the lawsuit claims. I'm going to crowdsource this one – what's the best sports/athlete analogy for this? I'm thinking of an athlete on one team who is traded mid-season to an arch rival to work for the other team. The one that came to mind will be a winner with my younger audience – the Chicago Cubs trading Lou Brock to the St. Louis Cardinals in June 1964. Around the league WNBA players want to get paid more, and that quest will be driven by additional revenue coming into the league. A key component of that will be advertising. The WNBA has struck a deal with Nielsen to measure its television viewership across traditional TV and streaming – the largest commercial measurement deal Nielsen has ever struck with a women's sports league, Axios's Sara Fischer reports . The College Football Playoff needs to figure out its next iteration, which could include moving to a 16-team field. ESPN has more details on the latest thinking about different big-time college football programs. One of 54 T206 Honus Wagner cards is currently up for auction, but you're going to need to pay at least $3.2 million, Sportico reports . The 1909 American Tobacco Company T206 is the gold standard for baseball card collectors. The last T206 Wagner up for auction sold in 2022 for $7.25 million by Goldin Auctions.
Yahoo
20-05-2025
- Business
- Yahoo
Chargers add equity firm Arctos as a limited partner after NFL owners approve sale
Dean Spanos and his family will retain control of the Chargers organization with approximately 61% of the franchise. (George Walker IV / Associated Press) The Chargers welcomed Arctos as a limited partner Tuesday as NFL owners approved a sale that transferred some the team's shares to the Dallas-based private equity firm that already has ties to the Dodgers. 'Arctos' track record in major professional sports speaks for itself," Chargers owner Dean Spanos said in a statement, "and we are grateful for their alignment moving forward during this time of tremendous growth for our organization.' Advertisement According to a league memo The Times obtained last week, Arctos acquired 8% of the team's shares. Spanos and his family will retain control of the Chargers organization with approximately 61% of the franchise. Arctos now has stakes in two NFL teams less than a year after the league approved private equity ownership. The company acquired a 10% stake in the Buffalo Bills in January, adding to its portfolio that already included MLB, NBA, NHL and MLS teams. Arctos has ownership stakes in six MLB teams: the Dodgers, Chicago Cubs, San Francisco Giants, San Diego Padres, Houston Astros and Boston Red Sox. Read more: NFL owners vote to allow players to compete in flag football at 2028 L.A. Olympics 'We're honored to join the Los Angeles Chargers ownership group and are grateful to Dean and the rest of the management team for their partnership," Arctos cofounder and co-managing partner Doc O'Connor said in a statement. "We're excited to get to work and help the team achieve their vision however we can.' Advertisement Approaching a decade since their move to L.A., the Chargers have added two major ownership groups in the last year. Detroit Pistons owner Tom Gores bought a 27% stake in the team in September, resolving a long-running dispute between Dea Spanos Berberian and her siblings as Gores and his wife bought Spanos Berberian's share of the franchise. Get the best, most interesting and strangest stories of the day from the L.A. sports scene and beyond from our newsletter The Sports Report. This story originally appeared in Los Angeles Times.
Los Angeles Times
20-05-2025
- Business
- Los Angeles Times
Chargers add equity firm Arctos as a limited partner after NFL owners approve sale
The Chargers welcomed Arctos as a limited partner Tuesday as NFL owners approved a sale that transferred some the team's shares to the Dallas-based private equity firm that already has ties to the Dodgers. 'Arctos' track record in major professional sports speaks for itself,' Chargers owner Dean Spanos said in a statement, 'and we are grateful for their alignment moving forward during this time of tremendous growth for our organization.' According to a league memo The Times obtained last week, Arctos acquired 8% of the team's shares. Spanos and his family will retain control of the Chargers organization with approximately 61% of the franchise. Arctos now has stakes in two NFL teams less than a year after the league approved private equity ownership. The company acquired a 10% stake in the Buffalo Bills in January, adding to its portfolio that already included MLB, NBA, NHL and MLS teams. Arctos has ownership stakes in six MLB teams: the Dodgers, Chicago Cubs, San Francisco Giants, San Diego Padres, Houston Astros and Boston Red Sox. 'We're honored to join the Los Angeles Chargers ownership group and are grateful to Dean and the rest of the management team for their partnership,' Arctos co-founder and co-managing partner Doc O'Connor said in a statement. 'We're excited to get to work and help the team achieve their vision however we can.' Approaching a decade since their move to L.A., the Chargers have added two major ownership groups in the last year. Detroit Pistons owner Tom Gores bought a 27% stake in the team in September, resolving a long-running dispute between Dea Spanos Berberian and her siblings as Gores and his wife bought Spanos Berberian's share of the franchise.
NBC Sports
15-05-2025
- Business
- NBC Sports
Report: Chargers in talks to sell stake in team to private equity firm Arctos
Private equity firm Arctos Partners bought a stake in the Bills last year. It could own minority interest of the Chargers soon. Randall Williams of Bloomberg reports the Chargers and Arctos are in talks. The Chargers have talked to the other three of the league's approved private equity groups, according to Williams, with negotiations with Arctos the most advanced. The NFL changed its investment rules in August, allowing private equity to own as much as 10 percent of a team. Arctos purchased a 10 percent stake in the Bills in December, and Dolphins owner Stephen Ross sold a 10 percent stake of the Dolphins, Hard Rock Stadium, the Miami Grand Prix and the Miami Open tennis tournament to Ares Management. Arctos, which is Dallas based, was founded in 2019 and is headed by managing partners Ian Charles and David O'Connor. It is the first private equity firm to gain approval to invest in all five major North American leagues, and it owns stakes in more than 20 sports franchises.
