Chasing sports deals used to be seen as a niche pursuit. Now Wall Street’s leading dealmakers are competing for fees in everything from football to cage fighting, after takeover activity in the world of professional sports hit new heights.
Investment banks helped steer about $25 billion of sports-related mergers and acquisitions in 2023, Bloomberg-compiled data show, making it the third consecutive year of record-breaking transaction values in the sector.
The run has provided bankers with much-needed respite from the deals slump affecting many major industries. By contrast, billionaires, private equity firms and hedge funds have been writing ever-larger checks to pick up some of the world’s best-known sports clubs.
Dealflow in 2023 was led by multibillion-dollar takeovers of the National Football League’s Washington Commanders and National Basketball Association’s Milwaukee Bucks, the arrival of a new investor at English Premier League club Manchester United Plc and a move to combine World Wrestling Entertainment Inc. with Ultimate Fighting Championship.
Wall Street has gotten wise to the trend and has been preparing for more, with some banks, like Goldman Sachs Group Inc. (NYSE: GS), creating dedicated desks to capture dealflow, and others, like JPMorgan Chase & Co. (NYSE: JPM), pulling in bankers from other teams to work on sports mandates. Specialist advisers such as Raine Group, Moelis & Co. (NYSE: MC) and Rothschild & Co. are also in on the act, going toe-to-toe with larger rivals on the biggest deals.
Lazard Inc. recently hired former LionTree partner Ben Braun to run its run its global media, entertainment and sports group, as the investment bank seeks to win more fees.
“The sports sector is now seen as an asset class in its own right, which saw plenty of activity in what was a relatively quiet year for dealmaking across the board,” said Greg Carey, global co-head of sports franchise in investment banking at Goldman Sachs.
Goldman Sachs was the leading M&A bank in professional sports in 2023, the data shows, with a 44% share of the market by deal value. Last year, the firm named Carey and David Dase to run a new investment banking team to help wealthy clients invest in sports. Goldman’s notable roles included advising British billionaire Jim Ratcliffe on his acquisition of a 25% stake in Manchester United.
“Advising and financing our clients in the sector plays an important part of our overall investment banking franchise as the interest in sports continues to grow across the globe,” said Carey.
Money has been flowing into sports as investors like Ares Management, Clearlake Capital Partners and Saudi Arabia’s Public Investment Fund realize there’s more on offer than just trophy assets. Clubs have hordes of loyal fans that spend money supporting teams through good times and bad, promising rewards for those that can find new ways of tapping this revenue stream.
There’s also the chance to gain exposure to big-money broadcasting deals, which have only been increasing in value at the top end of sports thanks to the proliferation of streaming channels and ever-expanding global reach of leagues like the NFL and Premier League.
“A lot of savvy investors, sovereign wealth funds, high-net-worth individuals and even private equity now look at sports as something interesting and profitable,” said Amanda Staveley, founder of PCP Capital Partners and co-owner of English football club Newcastle United FC. “Enterprise values for sports teams have continued to rise at remarkable rates, especially in football.”
This all means there’s plenty of work going around for Wall Street banks — big and small — starved of deal-flow elsewhere.
Raine is one major beneficiary of surging sports deals. The New York-based boutique, co-founded by former Goldman Sachs banker Joseph Ravitch, gained worldwide attention from managing the sale of English football club Chelsea FC to a Clearlake-backed consortium in 2022. It followed that up by managing the takeover of French football club Olympique Lyonnais, helping the U.S. Glazer family sell shares in Manchester United and advising on the WWE-UFC tie-up.
“We believe sports is the most valuable form of content in the shifting media ecosystem and not only will media rights continue to increase, but forms of sports monetization will multiply,” a spokesperson for Raine said.
Raine was second only to Goldman Sachs as an adviser on professional sports M&A in 2023, with a 41% share of the market by value, the data show. The bank looks on course to have another strong year, as it’s advising European football clubs Inter Milan, AS Monaco and Club Brugge on options including stake sales or outright sales.
Raine’s work last year put it neck-and-neck with another Wall Street powerhouse on sports M&A: JPMorgan, which has in recent years turned to technology, media and telecommunications specialists like Harry Hampson and Gian Piero Sammartano to help with deals in the sector. London-based managing director Hampson advised Ratcliffe on buying a stake in Manchester United, having worked on the Glazers’ investment in the club almost 20 years ago.
It’s not just takeovers, with banks having also picked up lucrative work from sports clubs and their owners on everything from capital raisings and block trades to loans and other financings. JPMorgan was last year involved in funding the redevelopment of some of the world’s major sporting arenas, including those of Spanish football giants FC Barcelona and Real Madrid CF and the NFL’s Tennessee Titans. Goldman Sachs led the Barcelona stadium deal and a refinancing of Olympique Lyonnais.
Bank of America Corp. was also involved in financings, including for Chelsea, alongside its M&A mandates. BofA was an early mover in the sector, creating a sports financing and advisory group in the early 1990s under bankers Jim Nash and Elliott McCabe, who remain with the firm. In 2023, BofA worked on the the $6 billion takeover of the Washington Commanders by an investment group led by Apollo Global Management Inc. (NYSE: APO) co-founder Josh Harris, and was also among advisers to a Qatari consortium that tried to buy all of Manchester United.
The battle for sports mandates is only likely to intensify, as more firms move in to grab a slice of the burgeoning market.
They include: Montminy & Co., a California-based investment bank that acted on the sale of Premier League team AFC Bournemouth to Bill Foley and is now helping lower league Queens Park Rangers FC explore options; Oakwell Sports Advisory, which advised the International Tennis Federation on the sale of a stake in the Billie Jean King Cup; and Tifosy Capital & Advisory, which is running the pending takeover of Everton FC by 777 Partners LLC.
And new boutiques are springing up, adding further competition. Late last year, the merchant banking arm of Hollywood talent scouts Creative Artists Agency teamed up with Wall Street rainmaker Michael Klein to launch CAA Evolution, an advisory firm dedicated to the sports, media and entertainment industries.
“Sport is much more investable than it ever was,” said Staveley. “The investment banks see they have to service a growing asset base.”
