It's that time of the year when the Indian Premier League spreads its wings, to attract buyers to its lucrative brand that is muscling its way amongst the top sporting leagues. Soaring values have given birth to rise in the number of participating teams. From a lonesome 8 to a duel 10, the IPL will now see two new freshers who will grab the spot light in its next high-octane edition. Of the two, one plays a big hand in investing in sport. Here's everything there is to know about Ahmedabad's new owners, CVC Capital.
Who are they?
CVC is a Luxembourg-based international private equity investment firm that has $125 billion of assets under management, $165 billion of funds committed and a global network of 25 local offices.
The company acquired Ahmedabad by winning the bid known to be worth Rs 5625 crores. CVC isn't completely new to the IPL, since they had previously been in discussions with Rajasthan Royals and Delhi Capitals which unfortunately didn't materialise.
Which sports have they invested in?
The group has previously owned Formula One, between 2006 and 2017, before it was taken up by Liberty Media. It was a financially lucrative deal with an estimated return of over 300%. The group earned more from the rise of the Grand Prix Circuit than anyone else.
CVC spent big money to get their hands on F1: one billion dollars in funds plus loans worth a total of $2.1 billion. But they reaped the rewards, taking $4.5 billion out of the sport, an above-average return on that initial stake.
CVC agreed a deal to take roughly 11% of La Liga’s television rights over up to 50 years in exchange for €2.1bn funding, most of which will be offered as interest-free loans to clubs, with CVC planning to take an active role in managing media rights. However, two of Spain's heavy-weight clubs i.e. Real Madrid and Barcelona opted out, along with Athletico Bilbao and another unnamed club.
The deal shows how European football is embracing new ways of raising funds for clubs that have missed out on an estimated €9bn over two pandemic-hit seasons.
CVC have invested in the Gallagher Premiership, Guinness Pro14 and the Six Nations. It brings CVC’s total investment in professional rugby union to more than £700 million.
It is also set to buy a 15% to 20% share in the commercial business of South Africa’s rugby union team. It would expand CVC’s influence beyond Europe’s rugby nations for the first time and would see the private equity firm have a stake in seven of the world’s top 10 rugby nations.
Its latest investment in professional sport entails a deal worth US$300 million with the International Volleyball Federation (FIVB).
This will ultimately lead to the creation of Volleyball World, a new commercial entity that will operate international events such as the FIVB World Championship, qualifiers for the Olympic Games and the Nations League national team tournament. It will focus on matters such as event hosting, fan experience, media, opportunities around data and digital, and sponsorship growth.
In 1998, CVC Capital bought the motorbike racing tournament MotoGP, its first of many investments. The company netted 700% in 8 years when they sold MotoGP. This lead to the start of a telling financial tale.
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