In some ways, this is nothing new – most sports have always recognised the importance of superstars. For example, MLS’s ‘Designated Player’ rule which enables teams to pay players outside of the salary cap was created to enable David Beckham’s move to LA Galaxy back in 2007. But the attention economy – where all forms of entertainment compete for the attention of Generations Z and Alpha – is exacerbating the trend. As a result, sports properties are now seeking to find ways to attract the best athletes to their competitions, for which capital is generally required. While LIV Golf is leveraging the Public Investment Fund of Saudi Arabia, many sports properties are turning to Private Equity to raise the capital necessary to secure the services of the best. CVC Capital Partners alone have invested in Rugby, Football, Cricket, Motorsports, and Volleyball.
Football’s Bundesliga is the most recent ‘Big Five’ European league considering raising capital through private equity in an attempt to grow overseas audiences. Plans are reported to include opening new offices overseas, tours and the creation of a direct-to-consumer streaming platform. While these all have merit they are no more important than ensuring the league is home to football’s biggest superstars. Currently, Bundesliga clubs pay out less of their revenue to players than any of the other big 5 leagues, limiting their buying power. This, along with adding jeopardy to the competition (Bayern Munich have been champions since 2012) – will be the biggest draw for young and international fans alike.