Welcome to the second edition of our weekly newsletter on sports investment. Thank you for your wonderful reception to our first piece, we’ve taken your feedback into account and will keep improving our work. This week, we have a diverse platter for you: we’ll talk about golf, cricket, football, betting, basketball, and tennis!
The Sport Investment Studio is an investment and advisory platform dedicated to transactions a the intersection of Sport, Media and Entertainment based in Paris.
Data giant Sportradar acquires IMG Arena, gains access to key betting rights.
💵 What: Sportradar, the premier data provider and aggregator for most major European sports entities, has agreed to buy IMG Arena, and its constituent betting rights portfolio. In what looks to be a remarkable deal for Spotradar, it is in fact Endeavor that has paid them $225 million to acquire the property.
🤔 Why: A key part of Sportradar’s business involves measuring and packaging data so that it can create odds for bookmakers. It also sells a variety of other services to bookmakers, and assists sports federations and leagues with both anti-corruption, and even broadcasting services. Thus, this deal, which gives the company access to 70 major sports rightsholders and 30,000 discrete streaming events, will further consolidate its ability to package and sell unique products to its clients.
For Endeavor, the IMG Arena portfolio had become something of a white elephant, as they had paid far more than what they could leverage out of the rights they held. However for Sportradar, this is their key competence, and they’re confident that they can turn a profit on the rights they now hold. The company’s EBITDA stood at a solid $240.9m last year, and these numbers are now likely to get another boost.
📰 Read more:
All the information on Sportradar’s acquisiton of IMG Arena’s betting portfolio (Sportradar)
Details on the deal itself, and on IMG’s troubles entering data distribution (Sport Business Journal)
A November 2024 story on Endeavor’s long struggle to sell IMG Arena. (Sport Business)
Boston Celtics sold for an American record fee of $6.1 billion, owners net 1,700% return.
🏀 What: Reigning NBA champions Boston Celtics have sold a 51% stake in the team to local businessman Bill Chisholm at a valuation of $6.1 billion. Private equity firm Sixth Street will also be among the buying party, and have spent around a billion dollars on their end. Existing CEO and Governor Wyc Grousbeck will remain at the helm of the team management until 2028, and is hoping to sell the rest of the franchise at a $7 billion valuation. This is now the largest sale of a sports team in American history.
🤔 Why: The Grousbecks had bought the team for $360m some 23 years ago, when the ownership landscape of American sport was very different. Valuations and revenues have skyrocketed since then, and understandably, the Grousbecks now feel that they’ve made a good return on investment.
For Chisholm’s consortium, the incentives are multi-fold. Players like Sixth Street want to expand their footprint in US sport, while Chisholm himself is a lifetime supporter of the Celtics. The sale also comes at a crucial time for the Celtics, who despite being champions, could be forced to trim their payroll due to the NBA’s rules on collective bargaining and its luxury tax. This is of course, at odds with the team’s competitive balance. However, despite all the question marks and thinkpieces, one thing is clear: the NBA’s allure is alive and well, and this valuation is a massive testament to that.
For the NBA, the valuation will help fund a much-awaited expansion, and that in turn will lead to an even bigger pool of money in the system.
📰 Read more:
The facts and details surrounding the deal. (Sportico)
Forbes’ wonderful overview on who exactly Chisholm is, and his rise to the top. (Forbes)
Buy a meal, get a Ligue 1 subscription: DAZN and McDonald’s combine in desperate play to gain viewership.
📺 What: DAZN, the Ligue 1’s primary broadcaster, combined with title sponsor McDonald’s to come up with a special offer: the first 120,000 people who ordered a 15 euro meal on the app would gain access to a Ligue 1 subscription on DAZN until the end of the season. Given that a monthly subscription for the league usually sells for 40 euros, this is quite the steal, and quite the devaluation of what is supposed to be one of the best football leagues in the world.
🤔 Why: DAZN’s struggles to attract an audience to its Ligue 1 broadcasts is no secret. It aimed for 1.5 million subscribers by the end of the season, and up until a couple of months ago, only had around a third of that. It withheld payments worth €35 million to the league in January, which then led to the league taking them to court. This stoked fears of a complete contractual collapse. Those have been allayed for now, but the league and broadcaster have had to come up with increasingly desperate ways to sell the league as it approaches the business end of the season. For example, Le Classique between Marseille and PSG was shown live in IMAX cinemas around France at a price of 20 euros per ticket.
That has now been followed up with this deal, which equates France’s premier football league to a burger, coke and some fries. Unsurprisingly, many have seen the programme to be a mockery of French football. However, the league’s leaders have defended the deal, citing that its immediate success, and the potential such hype marketing holds in reviving interest in the product, if only for hype value. The offer has worked because it is so cheap, but is that really a good thing for Ligue 1’s long term prospects, and its perceived value?
📰 Read more:
Le Parisien’s inside view on what prompted the deal between the two parties, and evidence that despite public ridicule and skepticism, it might yield successes for the league. (Le Parisien)
Some more details on DAZN and McDonald’s unlikely partnership, with hints that there may be more such stunts soon. (RMC Sport)
An overview on DAZN and Ligue 1’s recent squabbles, and signs of possible reconciliation. (Le Figaro)
Other pieces of news that interested us:
Hedge fund titan Bill Ackman, and a number of tennis superstars, including Novak Djokovic, are suing tennis’ governing bodies over boiling concerns that professional tennis players are overworked and grossly underpaid. Commercial revenues, especially in the Grand Slams, have been skyrocketing, but players believe that their prize money has remained somewhat stagnant. (Financial Times)
The 18th edition of the Indian Premier League, the world’s most valuable cricket league, has kicked off. Also the second most valuable sports league in the world after the NFL on a per-match basis, the two month event is a national phenomenon in India. Read more on the league’s skyrocketing team valuations, and the institutional investment they are now attracting. (Houlihan Lokey)
Good Good Golf, a trailblazing American golf media company and lifestyle brand, has secured $45 million in funding from high-profile investors including Peyton Manning, Sunflower Bank and Manhattan West Private Equity. It’s hard to compartmentalise the brand into one domain of activity, which makes the project all the more interesting. They have nearly 2 million subscribers on YouTube (largely thanks to light-hearted golf challenges), have a budding clothing brand, and are now organising live golf events of their own. (Good Good Golf)
That’s all for this week! For more content, follow us on LinkedIn, and if you’re interested in learning more about us, please visit www.sportinvestmentstudio.com