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Private equity moves on college sports with Learfield takeover

Tim Baysinger
Sep 14, 2023
Illustration of a college basketball player with a dollar sign on his jersey.

Illustration: Shoshana Gordon/Axios

Private equity managers are going back to school.

Why it matters: The flow of TV dollars, mainly driven by college football, is widening the haves and have-nots across the NCAA, forcing schools to seek outside funding.

Driving the news: Learfield, a college sports marketing and content giant, was taken over by three investment firms Wednesday as part of a debt restructuring.

Zoom in: PE has been slowly encroaching into college sports in recent months.

  • In August, Florida State reportedly tapped JP Morgan to explore fundraising options, with Sixth Street Partners showing interest.
  • Florida State president Richard McCullough complained that the school's athletic department was $30 million behind in revenue compared to the SEC and Big Ten.
  • "We of course are not satisfied with our current situation," he said last month.

The big picture: Sports have become a hotbed for PE investment in recent years.

  • Many Premier League clubs have PE ownership, and other firms are trying to get in on TV rights for many European leagues, including Italy's Serie A and Germany's Bundesliga.
  • In the U.S., the NBA, NHL, MLS and MLB allow PE firms to take out minority ownership stakes — though the NFL has remained off-limits.
  • Over the last few years, funds like Arctos and Dyal that are solely used to buy minority ownership stakes have popped up.
  • RedBird Capital has a joint venture with the NFL's VC arm called EverPass, an entity created to handle commercial media rights such as NFL Sunday Ticket.

Details: The Learfield agreement will reduce its debt by more than $600 million while adding $150 million in new investment and helping the company avoid bankruptcy. The three firms — Clearlake, Charlesbank and Fortress — were Learfield's top lenders.

  • As part of the deal, Endeavor and its PE partner Silverlake will become minority partners.
  • Learfield functions as a middleman for many schools, handling multimedia rights that include merchandise sales, stadium sponsorships, ticketing and content development.
  • Some of Learfield's top clients include the University of Texas and Alabama.
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