KKR, the American asset management behemoth, is in detailed talks about a multibillion pound deal to take a stake in the sports investment vehicle which owns stakes in Six Nations Rugby, women’s professional tennis and the top flights of French and Spanish men’s football.
Sky News has learnt that KKR has emerged as the leading candidate to spearhead a roughly €2.75bn (£2.4bn) transaction that would see it become a shareholder in CVC Capital Partners’ Global Sport Group (GSG).
City sources said that KKR was in advanced negotiations about a deal, although other parties, including Ares Management, remained in the frame to participate.
The alternative of a debt-only financing for GSG has also been explored in recent weeks.
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A deal involving KKR would underline the ambitions of GSG to become the most sophisticated global investor in elite sports teams, leagues and other related properties.
KKR recently agreed to acquire Arctos Partners, a sports-focused private equity firm, for about $1bn, reinforcing burgeoning investor appetite in the sector.
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News of KKR’s advanced interest in a stake in GSG comes on the same day that the CVC-backed vehicle confirmed its acquisition of Equine Network, the largest for-profit equestrian sports league in the US – which was revealed by Sky News last weekend.
Announcing the deal on Wednesday, Gemma Wright, a partner in CVC’s sports, media and entertainment team, said: “The creation of Global Sport Group was driven by our conviction that premium sports leagues benefit from long-term, specialist ownership and collaboration.
“CVC’s investment experience in sports spans over twenty years and, while much has changed in that time, sports IP remains a very attractive opportunity in which we continue to see significant potential for further innovation and growth.”
GSG, which is chaired by Marc Allera, the former BT Group consumer chief, also owns stakes in Premiership Rugby and international volleyball.
Its new war chest is aimed at acquiring a series of other assets in sports with substantial commercial growth prospects.
Once completed, the deal will enable CVC to remain invested in its sports portfolio for longer, while also paving the way for the sale of a minority stake in GSG or a future initial public offering on a major international exchange.
Having made billions of dollars from its ownership of Formula One motor racing – one of the most lucrative deals in the history of sport – CVC has bought stakes in leagues and other assets spanning a spectrum of elite sporting assets over the last two decades.
Its investment in the media rights to La Liga – Spain’s equivalent of the Premier League – is expected to generate a handsome return for the firm, although a comparable deal in France has faced challenges amid broadcasters’ financial challenges in the country.
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CVC’s backing of global sports properties is intended to position it to maximise their commercial potential through new media and sponsorship rights deals, as well as their expansion into new formats aimed at drawing wider audiences amid rapid shifts in media consumption.
Its sporting assets will continue to remain autonomous and independent of one another, despite the new umbrella holding entity.
One expected benefit of the GSG approach would be the sourcing of new investment opportunities, with CVC potentially interested in the acquisition of further elite tennis tournaments.
Global sports properties have become one of the hottest growth areas for private capital in recent years, with firms such as Ares, Silver Lake Partners and Bridgepoint all investing substantial sums in teams, leagues and other assets across the industry.
KKR declined to comment, while CVC could not be reached for comment.
