From Billionaires' Toys to Thriving Investments: The Sports World is Benefiting from Private Equity Capital

In this commentary, we discuss the credit implications of the influx of private equity capital to the sports world.

Key highlights include:
-- Sports leagues worldwide have loosened ownership rules, allowing private equity investment.
-- Private equity firms are eager to invest in sports transactions because of historically strong and stable returns, which provide added diversification.
-- This development has benefitted the credit profiles of sports issuers as it provides additional liquidity, the potential for improved operating returns and efficiencies, and directly increases franchise values.

“The introduction of private equity investment in sports has been a positive development for both sports franchises and private equity firms,” said Michael Goldberg, Senior Vice President of Sports Finance at DBRS Morningstar. “We expect the rules surrounding franchise ownership to evolve and expand as sports-specific private equity funds raise more capital.”