Serie A clubs agree on private equity investment; partner not yet chosen
The 20 clubs from Italian soccer's top-tier Serie A today unanimously agreed to the creation of a company that would manage the league's broadcasting rights, and to outside investment from private equity, but have not chosen a specific partner yet.
At a meeting in Milan, the clubs backed the approach, which had been mooted for some months, and were presented with a summary document of the various bids, compiled by advisers Lazard and Gianni Origoni Grippo Cappelli.
However, a final decision on which private equity firm to select as an investing partner has not been made yet, and may not be reached until the end of September, with the league’s next priority to further analyse and explore the two offers which have made it to this stage.
One offer is from a consortium of three private equity firms - CVC Capital Partners, Advent and Italian state-backed fund FSI - which have proposed a joint investment offer of at least €1.625 billion ($1.92 billion) for 10 per cent of the new company.
CVC would own half the stake, Advent 40 per cent, and FSI 10 per cent.
The other joint offer, from a group including the Bain Capital and NB Renaissance firms, is again for 10 per cent, valued at €1.35 billion.
Serie A president Paolo Dal Pino had long favoured the private equity partnership approach, but there had been many competing viewpoints.
Lazio president Claudio Lotito was said to favour a securitisation and bridging loan offer from Fortress, while Napoli president Aurelio de Laurentiis, along with clubs including Udinese and Fiorentina, thought that the league should establish and distribute an in-house league TV channel using loans only.
China’s Wanda Sports and Spain’s Mediapro were understood to have offered €1.5 billion and €1.3 billion respectively per season, to operate and distribute such a channel.
In July, Serie A placed a limit of 15 per cent on how much of any new company a private equity firm or consortium could acquire, in order to ensure the league itself retained fundamental control.
This came as a blow to CVC, which entered into exclusive negotiations with the league in May over an offer to acquire 20 per cent of any new company established, in a deal worth some €2.2 billion. That negotiating period however ended without success.
Proposals have also had to contain “a legal opinion prepared by a leading law firm, in which it is concluded that the terms and conditions comply” with Italy’s Melandri law, which governs the collective selling of media rights in the country.
A final vote on which offer to go with will be made in the next two or three weeks, according to Torino chairman Urbano Cairo.
Alternative proposals to have recently fallen by the wayside include financing offers from Gso-Blackstone, General Atlantic, Apollo Group Management and Sixth State, a branch of US private equity firm TPG.
Fortress' hybrid offer was reportedly also rejected at an earlier stage.
At present, domestic media rights to Serie A are held by pay-television operator Sky Italia and over-the-top subscription service DAZN in three-year deals worth €973 million per year that run to the end of the 2020-21 campaign. The IMG agency handles the international media and other commercial rights in an agreement worth more than €360 million per annum.
Infront Italy’s six-year, €5.94 billion minimum guarantee agreement to act as Serie A's exclusive adviser on both domestic and international media rights expires next year.