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Serie A clubs to discuss ‘final bids’ from trio of private equity groups

Italy’s Serie A football clubs are set to meet tomorrow (Wednesday) to discuss final offers made by three private equity groups for a stake in a new holding vehicle that will oversee the league’s broadcast rights.

The new entity would control Lega Serie A’s media-rights business for the next 10 seasons, with three different proposals on the table, according to Reuters, citing sources familiar with the matter.

CVC Capital Partners is said to have entered a joint bid with Advent and Italy’s state-backed investor Fondo Strategico Italiano (FSI) valuing a 10-per-cent stake in the vehicle at around €1.6bn ($1.89bn). A proposal from a consortium led by Bain Capital is said to be of the same value, while differing in its structure.

Meanwhile, US investment firm Fortress is said to have joined with Apax and Three Hills Capital Partners for a proposal consisting of equity and debt, with little governance control. Fortress is said to have tweaked an initial offer of debt financing to include an equity package, mostly provided by Apax.

Reuters said tomorrow’s meeting is not expected to result in a single bidder being invited to enter into exclusive talks, with 14 of the 20 Serie A clubs needing to back a proposal for a deal to be made.

The latest developments come after it was reported that a joint investment proposal from CVC, Advent and FSI, and one led by a separate consortium consisting of Bain Capital and NB Renaissance Partners were leading the running to drive the next stage of Serie A’s commercial development.

The two proposals were said to be among six to eight binding bids submitted ahead of an August 28 deadline set by the Lega, which has for some months been examining the idea of securing outside investment.

It is not yet clear whether the clubs will be able to align themselves behind one proposal. Reports suggest Lazio president Claudio Lotito is backing the Fortress hybrid bid, while Napoli president Aurelio De Laurentiis, supported by teams like Udinese and Fiorentina, wants the Lega to enhance its business independently.

De Laurentiis is understood to think the Lega could grow media revenues from €2.5bn to €2.9bn by centralising television production and creating a Serie A channel that can be sold directly to telecoms operators and OTT providers.

The Wanda Sports Group and its agency Infront along with Spanish agency and production group Mediapro are reported to have entered separate non-binding proposals to the clubs concerning the formation of a partnership to create this Serie A channel.

Infront has strong existing ties to the Lega. The agency holds a six-year near-€6bn minimum-guarantee agreement to work as its exclusive adviser on domestic and international media-rights sales. But that deal comes to an end at the close of the 2020-21 season. Infront has worked as the league’s media-rights adviser since 2008.

In July, Lega Serie A was said to have placed a cap of 15 per cent on any potential private equity investment into a new commercial entity. A letter from Serie A president Paolo Dal Pino to the interested parties is said to have added that the proposals must contain a legal assessment confirming that the terms and conditions of the bid comply with Italy’s Melandri law, which governs the collective selling of media rights in the country.

CVC was previously said to have enjoyed an exclusive negotiation window. CVC’s reported €2.2bn bid was to acquire 20 per cent of a new company that would manage the media rights, Serie A’s international trademark and commercial development, and part-finance a new investment fund responsible for stadium development.