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US private equity giant Sixth Street is preparing to raise its first fund focused on sports, according to Bloomberg.
The firm has reportedly entered preliminary discussions with potential investors about the investment vehicle, which will be focused on deals involving sports teams, leagues, media rights and other related companies.
Sixth Street, which manages assets cumulatively worth over US$75 billion, has become more active in the sports market in recent years. In 2022, it signed a 20-year agreement with Spanish soccer titans Real Madrid and events specialist Legends worth €360 million (US$388 million) around the operations of certain new businesses at the Santiago Bernabéu Stadium.
Following that, the firm agreed two separate deals worth a combined €507.5 million (US$547 million) for 25 per cent of Barcelona’s LaLiga media rights revenue for the next 25 years.
More recently, San-Francisco-based Sixth Street co-founded Bay FC, the National Women’s Soccer League’s (NWSL) newest franchise. It has pledged to invest US$125 million into the club’s development, which is separate to the founding kit sponsorship deal it reached last month ahead of Bay FC’s debut season.
Other sports-related investments Sixth Street has made includes a minority stake in the National Basketball Association’s (NBA) San Antonio Spurs. The firm is also the majority owner of Legends, which concluded the acquisition of event management agency ASM Global last November in a deal reportedly valued at more than US$2.4 billion.
Speaking in February, Sixth Street co-founding partner and chief executive Alan Waxman said that European soccer needed “more drama and innovation” to retain high interest from fans. He also predicted that women’s soccer would be the “biggest growth opportunity in sports over the next ten years”, citing the firm’s investment into Bay FC.
Sixth Street becomes the latest private equity firm to double down on investing in the sports market. Similar vehicles have already been created by the likes of Arctos, while banks such as JPMorgan and Goldman Sachs have formed specialist teams to offer advice and support for those looking to make deals in the sports sector.
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