Covid-19 heightens private-equity investors’ interest in sport | The Economist

Covid-19 heightens private-equity investors' interest in sport

As a business, sport has a lot going for it. Shame about the fans

“THE COVID situation has been a disaster for everybody,” says Andy Holt, the owner of Accrington Stanley, a football club in England's third tier. Fans have been locked out of the stadium since March. The loss of match-day revenue has hit smaller clubs the hardest. Accrington makes 40% of its revenue from tickets and food and drink, compared with around 15% for the elite clubs in the English Premier League. For now, Mr Holt is keeping the club going from his personal fortune. He believes other clubs are borrowing money “from wherever they can”. The coronavirus squeeze extends far beyond football, and into far glitzier and more lucrative arenas than Stanley's 5,000-capacity Wham Stadium (still known to many as the Crown Ground). Manoj Badale, the lead owner of Rajasthan Royals, a cricket franchise in the Indian Premier League, argues “sports bodies have never been put under the same level of financial pressure as they have in the past year.”

The numbers are dismal for sports organising bodies. The three big American sports leagues, the National Basketball Association, the National Football League and Major League Baseball, are facing a fall in revenue of $13bn in 2020. Deloitte estimates that the English Premier League will lose £500m ($670m). The England Cricket Board is expecting a shortfall of £180m. In France, Mediapro, the rights-holder to top-division football, in October withheld its payment of €172m ($209m) to the league, seeking to renegotiate its contract. Mr Badale believes that empty grounds and disruptions to media rights will “force sports to consider new sources of investment”.

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