Hear the duo eye £150m windfall from sale of stake in Matchroom Sport | business news

The father-son duo who have built Matchroom Sport into a global sports promotion empire are plotting a deal that will cement their status among Britain’s super-rich.

As Sky News is able to reveal, Barry and Eddie Hearn are in lengthy talks with at least three private equity firms over the sale of a substantial minority stake in Matchroom, which was founded 40 years ago.

KKR, CVC Capital Partners and Searchlight Capital are all said to be interested in working with Matchroom by completing a deal, with a decision on a preferred bidder expected in the coming weeks.

Sources said talks were centered on a transaction that could put the Essex-based Matchroom in value between £600m and £700m, although the figure could ultimately be outside that range.

The amount of stake the Hearns will sell and the structure of a deal are also yet to be determined, but if they proceed with the sale of a 25 per cent stake at the higher end of the likely range, it would suffice them a £175million windfall.

However, the duo are said to have no intention of giving up control of Matchroom, which they have grown into a powerhouse in the world of boxing and which also has a significant presence in sports like darts and snooker.

Matchroom was formed in its current form in 1982 and during its heyday dominated the management and promotion of snooker, with huge television audiences tuning in to see the likes of Steve Davis and Jimmy “Whirlwind” White.

Over the next decade it branched out into other sports, notably boxing, and in 1987 was responsible for staging the landmark fight between Frank Bruno and Joe Bugner at the grounds of Tottenham Hotspur’s White Hart Lane.

Since then it has grown into one of the major commercial players in the boxing world, promoting fighters such as Anthony Joshua, Katie Taylor and Josh Warrington.

Last year, it struck a global deal with sports-streaming platform DAZN, adding to a reported $1 billion deal in 2018 where DAZN agreed to show Matchroom’s fights in the US.

Matchroom maintains an association with Sky – the immediate parent company of Sky News – which is now focused on the channel’s coverage of the PDC’s World Darts Championship, held annually at London’s Alexandra Palace.

The Hearns’ company is also present in sports such as basketball, fishing, gymnastics, netball, billiards and tenpin bowling, although less well known internationally.

Anthony Joshua celebrates his win with the Hearns over Andy Ruiz Jr

Closing a deal to sell a stake in their empire would be lucrative for the Hearns, but would also underscore the ongoing boom in global sports-related assets even as deals dry up in much of the rest of the economy on recession fears.

In recent months, a group led by LA Dodgers shareholder Todd Boehly and Clearlake Capital have struck a record-breaking deal to buy Chelsea Football Club from sanctioned oligarch Roman Abramovich for a record-breaking sum.

AC Milan, newly crowned Serie A champions, have also changed hands for more than €1bn – a record for a club in one of continental Europe’s major leagues.

Earlier this month, the TV and streaming rights to Indian Premier League cricket were bought for more than $6 billion in deals involving global media giants like Disney.

The huge sums that continue to be paid for sports rights reflect the continued international commercial appeal of elite sport at a time when other genres have struggled to achieve meaningful growth, particularly among younger consumers.

Private equity firms have harnessed the potential to acquire sports and related media assets to create new commercial formats that are more easily embraced by both fans and broadcasters.

CVC has been the most prolific example of this, snagging league and team appearances in rugby union, cricket and volleyball.

It is also exploring a deal to unify the commercial rights to men’s and women’s tennis and is likely to become a contender for an upcoming auction of the commercial rights to German football’s top division, the Bundesliga.

The company’s investment in Formula 1 racing, which it exited by selling its remaining stake to Liberty Media Corporation in 2016, is often cited as one of the most lucrative in private equity history.

Silver Lake, the American buyout firm, is also among those who have begun investing heavily in the sports arena, including through a recently confirmed deal to buy a stake in the commercial rights to the New Zealand All Blacks.

Searchlight, another Matchroom supporter, has a track record of supporting big-name media companies, including through a recently announced deal for Gato Investments, one of its portfolio companies, to acquire Hemisphere Media Group, which caters to Hispanic and Latino audiences in the United States .

Meanwhile, a KKR-led consortium has snapped up the owner of bike brand Raleigh, with KKR reportedly among those interested in the Bundesliga deal.

Matchroom declined to comment on the talks with private equity firms, while KKR, CVC and Searchlight also declined to comment.

This weekend, the identities of all other parties in talks with the Hearns were unclear.

Hear the duo eye £150m windfall from sale of stake in Matchroom Sport | business news

Source link Hear the duo eye £150m windfall from sale of stake in Matchroom Sport | business news

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