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

The father and 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.

Sky News may reveal that Barry and Eddie Hearn are in detailed talks with at least three private equity firms about selling a substantial minority stake in Matchroom, which was established 40 years ago.

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

The sources said the talks centered on a transaction that could value Essex-based Matchroom between £600m and £700m, although the figure could fall outside that range.

The size of the stake the Hearns are selling and the structure of a deal have yet to be finalized, but if they proceed with the sale of a 25% stake at the top end of the likely range, it would give them a £175m windfall. .

However, the duo are said to have no intention of giving up control of Matchroom, which they have made a powerhouse in the world of boxing and which also has a substantial presence in sports such as darts and billiards.

Established in its current form in 1982, Matchroom dominated the management and promotion of snooker during its heyday, with large television audiences tuning in to see stars such as Steve Davis and Jimmy ‘Whirlwind’ White.

Over the next decade, he expanded into other sports, most notably boxing, and was responsible for staging the historic fight between Frank Bruno and Joe Bugner at Tottenham Hotspur’s White Hart Lane ground in 1987.

Since then, he has become one of the biggest commercial players in the boxing world, promoting the likes of 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 tie-up in 2018 that saw DAZN agree to show Matchroom fights in the US.

Matchroom continues to have a partnership with Sky, the immediate parent of Sky News, which now focuses on the broadcaster’s coverage of the PDC World Darts Championships held annually at London’s Alexandra Palace.

The Hearn firm also has a presence, although less prominent internationally, in sports such as basketball, fishing, gymnastics, netball, billiards and bowling.

Image:
Anthony Joshua celebrates winning his fight against Andy Ruiz Jr with the Hearns

Reaching a deal to sell a stake in their empire would be lucrative for the Hearns, but it would also underscore the continuing boom in global sports-related assets, even as trading in much of the rest of the economy dries up over fears of a recession.

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

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

Earlier this month, broadcast and television rights to Indian Premier League cricket were bought for more than $6 billion in deals involving global media giants such as Disney.

The huge sums that continue to be paid for sports rights reflect the current international commercial appeal of elite sports during a period when other genres struggled to achieve significant growth, especially among younger consumers.

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

CVC has been the most prolific example of this, acquiring stakes in rugby, cricket and volleyball leagues and teams.

It is also exploring a deal to unify commercial rights to men’s and women’s tennis, and is likely to be a contender in an upcoming auction of commercial rights to German soccer’s top flight, the Bundesliga.

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

Silver Lake, the US buyout firm, is also among those that have started to invest heavily in sports, including through a recently confirmed deal to buy a stake in the commercial rights of the New Zealand All Blacks.

Searchlight, another of Matchroom’s suitors, has a history of backing major media companies, including through a recently announced deal by Gato Investments, one of its portfolio companies, to acquire Hemisphere Media Group, which targets Hispanic and Latin American viewers in the US

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

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

This weekend, the identity of any other party to the discussions with the Hearns was unclear.

Leave a Comment