SIXTH STREET NEARS DEAL TO TAKE CONTROL OF SPORTS GROUP LEGENDS HOSPITALITY
The private investment group Sixth Street Partners is nearing a deal to take a majority stake in Legends Hospitality, the sports and entertainment company co-owned by New York Yankees and the Dallas Cowboys, that would value the group at $1.35bn, according to people briefed on the discussions.
The deal, which could be announced as soon as Monday night, would give Sixth Street a majority ownership of the company, which offers services including stadium concessions, naming rights and merchandise sales for a variety of professional and college sports teams. Baseball team Yankees and American football’s Cowboys would continue their involvement in the company, the people said.
The transaction underscores the influx of private capital into the realm of professional sports during the pandemic, as leagues and teams look to shore up financing as they contend with depressed or nonexistent ticket sales and associated concessions.
News of the deal was earlier reported by The Wall Street Journal.
The Legends deal by Sixth Street Partners, which has more than $50bn in assets under management, is its latest investment into an industry hard-hit by pandemic restrictions. In April the firm joined Silver Lake in raising $1bn in debt and equity for Airbnb, the short-term accommodations platform. In addition to Legends’ businesses for sport franchises, whose clients include the University of Notre Dame and Spain’s Real Madrid, the company also provides sales and experience planning at attractions including London’s View from the Shard and the One World Observatory at New York’s World Trade Center.
Sports leagues across the US and around the world have been hamstrung by the surging Covid-19 pandemic, particularly Major League Baseball, which relied on ticket sales and stadium concessions for almost 40 per cent of its revenues in 2019.
At the same time, valuations of clubs have only accelerated over the past year. In October the hedge fund titan Steve Cohen bought baseball team New York Mets for more than $2.4bn, a North American record. Last month Qualtrics founder Ryan Smith finalised a purchase of basketball team Utah Jazz for more than $1.6bn, according to a person familiar with the deal, up from the $24m paid by the previous owners in the mid-1980s.
In recent months private capital has been undeterred by pandemic distress and encouraged by steady or increasing appreciation of sports assets, seeking investments in the industry in anticipation of an eventual return to normalcy. “People are going to want to go to sports events, they’re going to want to go to concerts — whether that’s six months from now or 12 months from now, it’s going to come back at some point,” said one of the people briefed on the Legends deal.