CVC consortium wins out in private equity battle for Serie A
By Jonathan Rest
A consortium of private equity firms, headlined by CVC Capital Partners, has today been selected by Lega Serie A as the preferred partner on new a company that would manage the Italian soccer league's broadcasting rights.
CVC, along with Advent and Italian state-backed fund FSI, will now negotiate exclusively with the league, after their proposal was backed by 15 of the 20 Serie A clubs at a video conference today.
There were five abstentions.
The CVC consortium, which would take a 10 per cent stake in the media company, is valued at €1.625 billion ($1.9 billion). CVC would hold 50 per cent of the consortium's stake, with 40 for Advent and 10 for FSI.
It is understood some €1.1 billion will be released upon closing of the deal, and that the league will be able to buy back the shares (at a premium) after a certain number of years.
The CVC offer proposal had been favoured by Serie A president Paolo Dal Pino.
CVC had entered into exclusive negotiations with the league back in May over an offer to acquire 20 per cent of any new company established, in a deal worth some €2.2 billion ($2.5 billion).
That negotiating period ended without agreement, with the league subsequently reopening the bid process and limiting outside ownership to 15 per cent.
CVC, Advent and FSI were up against a joint pitch from USA's Bain and Italy's NB Renaissance, whose deal for 10 per cent was valued at €1.35 billion.
However, it emerged overnight that Fortress, the US private equity firm, had submitted an 11th hour bid to Serie A, having been dismissed from the process earlier this year.
In the end, the Fortress offer came in too late, with the 20 Serie A clubs having had some time to digest and analyse the two other private equity proposals.
Should the exclusive negotiations lead to an agreement, it will mark CVC's entrance into soccer, with the company having focused much of its intention in recent months on rugby union.
CVC holds a 27-per-cent stake in England’s top-tier Premiership Rugby and 28 per cent of the Europe-based Pro14, and is in negotiations to complete a deal to acquire a 14.5-per-cent holding in the commercial rights to the Six Nations. That deal has been held up by the coronavirus pandemic.
It was the owner of Formula 1 until selling the sport to USA’s Liberty Media in a $4.4 billion deal in 2016.Serie A will be hoping to conclude talks soon, with its present three-year domestic rights agreement with pay-TV's Sky and over-the-top subscription service DAZN, worth €973 million per season, expiring at the end of the 2020-21 campaign.
The IMG agency handles international media and other commercial rights to Serie A 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.