Serie A looks to private equity to raise €2bn. CVC and Blackstone open talks

May 7 – Italy’s Serie A, reeling from the coronavirus shutdown, has opened discussion with private equity firms CVC Capital Partners and Blackstone Group Inc about the opportunity of injecting new money into the clubs and the league.

Italian top flight clubs have slowly returned to training this week, but on Wednesday an unidentified Torino player tested positive in a first round of tests, casting more doubts over the immediate future and return of Italy’s domestic topflight.

The longer the shutdown goes, the more precarious the finances of Italian clubs will become, creating an opportunity CVC Capital Partners and Blackstone Group Inc are keen to explore.

CVC has been in talks to acquire a 20% stake for €2 billion in Serie A’s commercial rights, valuing the league at €10 billion. A potential deal would allow CVC also to have a say in the sale of broadcasting rights from 2021 for a period of ten years.

The value of domestic rights decreased in the current cycle by 9% compared to the previous one, from €3.2 to €2.92 billion – a painful turn, especially as Italian clubs are traditionally heavily dependent on broadcasting revenues, according to KPMG Football Benchmark data.

However, while the domestic deal reduced, from international rights more than doubled indicated that there is growth opportunity.

Domestically the impact of streaming opportunities are unclear as Serie A is already advanced in its use of digital channels. Pay-TV broadcaster Sky Italia currently shares live rights with the sports streaming giant DAZN, as part of separate 3-year deals worth about €937 million per year.

Blackstone, with a reputation of being one of the most aggressive private equity groups in the world, looks to be going down a more club focussed route and is reported to be considering offering clubs loans to help mitigate the financial fallout from the shutdown.

Italy suspended Serie A on March 9, but last week the country’s sports minister Vincenzo Spadafora said that the window to restart the league is getting narrower, even if the number of confirmed coronavirus cases has peaked.

Contact the writer of this story, Samindra Kunti, at moc.l1591039416labto1591039416ofdlr1591039416owedi1591039416sni@o1591039416fni1591039416