The entry of investment funds into sport: NBA, LaLiga, Mediapro and Dorna representatives debate it
Filling the increasing Covid revenue hole forces major leagues and teams to approve historic deals. They bring in new conglomerates that transform their ownership structures. During the Sports Sponsorship Barometer 2020, Jesús Bueno (NBA), Pau Serracanta (Dorna Sports), Jorge de la Vega (LaLiga) and María del Carmen Fernández (Mediapro) debated the growing involvement of investment funds in the industry.
The NBA sees the entry of investment funds as an opportunity for growth. "They act as accelerators for the properties, as levers to accelerate their evolution, as they give fuel to the clubs to continue growing", says Jesús Bueno, NBA vice-president in EMEA, who discussed this issue with LaLiga executives, Mediapro and Dorna at the presentation in January of the SPSG Consulting Sports Sponsorship Barometer. Talking about funding is becoming more and more part of our dialogue: if five or six years ago it was in the conversation every X months, now it is every week''. Bueno concludes that their entry into the industry is good news: it means that "smart money is coming to sport". LaLiga also applauds the entry of investment funds. "They are betting on future value and if this proliferation of operations is happening it is because there is confidence in the financial environment about the industry's growth forecasts, it is an indicator of health', says Jorge de la Vega, marketing and commercial director at LaLiga. "The key is to understand why they appear: football lacks liquidity and needs these figures and the joint work to understand that the contributions of the funds will generate future value," he adds. To this end, he points out that it is crucial that, beyond a a specific need for funds, there is a common objective with the fund that is sustained over time.
"It is a natural process, the investment funds see sport properties as more mature, serious and accessible, and that is very positive" - Pau Serracanta
Pau Secarranta, commercial general manager at Dorna Sports, explains that his experience with private equity funds as shareholders has been "very positive". Especially during the pandemic, when in the midst of paralysis (the main business lies in holding races, so their cancellation translates into a heavy burden of fixed costs), these firms called for calm. Secarranta understands that the funds provide liquidity "to move forward", so they can be good travelling companions. "It is a natural process, these firms see the sport as more mature, serious and accessible and that is very positive," he concludes. At Mediapro, whose majority shareholder is Orient Hontai Capital, they emphasise the search for balance "between partners who provide for needs to be covered in the short and medium term and industrial partners who help generate value in your business", says Mª Carmen Fernández, Innovation and New Business manager at Mediapro. The manager highlights the role of industrial partners that were not part of the sports scene a few years ago, such as Microsoft or Amazon, which "probably also have investment and economic capacity". Within this framework, and in this game to combine partners, "an exciting future awaits us to generate ecosystems of trust in industries that until now have not collaborated in the way they do".