Bloomberg — Blackstone Group Inc. says the recent surge of investor interest in sports and media businesses is only the beginning.
The world’s largest private equity firm and its rivals are pouring billions of dollars into film, television and music rights companies in a bid to profit from the growing popularity of the content they generate. Expect more sports deals for similar reasons, said Global Head of Blackstone’s Tactical Opportunities Group David Blitzer, who owns stakes in sports teams including Premier League soccer club Crystal Palace FC.
“You are also seeing institutional capital come into the sports business in a dramatic way,” Blitzer said in a Bloomberg TV interview at the SuperReturn conference in Berlin. “My guess is that is going to continue unabated, so I think there will be more and more institutional investment opportunities.”
Content consumption and creation was “one of the big themes” Blackstone was exploring, said Blitzer. In recent months, the firm has snapped up assets including Moonbug Entertainment Ltd., the firm behind the popular YouTube children’s channels Cocomelon and Blippi, and Hello Sunshine, the production company founded by actress Reese Witherspoon.
The investment opportunity in sports teams was based on the value of their media rights and the content associated with televised matches, Blitzer said. This appeal, coupled with the fact that there are only a finite amount of assets, has seen investment firms invest heavily in teams in recent years.
“People have realized at their core that these are amazing businesses in terms of the creation content and the ultimate value of media rights,” Blitzer said.
High profile deals have included Silver Lake’s acquisition of a stake in U.K. soccer club Manchester City and U.S. private-equity firm Arctos Sports Partners acquiring a minority stake in National Basketball Association team Golden State Warriors.