Marathons and other running events are attracting the attention of private equity firms, according to BusinessWeek. This isn't the industry's first venture into the outer edges of professional sports. Mandalay Sports Entertainment, controlled by Seaport Capital, owns five minor league baseball teams.
According to The Dow Jones Private Equity Analyst Conference, "Private equity investors already are involved in the ownership of the Boston Celtics, Golden State Warriors, San Jose Sharks and Texas Rangers and several private equity firms are looking at buying franchises or even the entire National Hockey League."
In a way, these are great examples of the kinds of businesses private equity firms love: Strong moats, often asset-lite models,
But there could be another added bonus here. Private equity firms frequently take portfolio companies public after they improve operations and increase profitability. Given the sexiness of professional sports, the ventures could command premiums on the IPO market. Brokers wouldn't have a hard time pitching retail investors on the idea of owning a professional sports team or a well-known marathon.
It seems likely that private equity interest in sports franchises and events will increase over the years.
Buyout shops invest for the long run ... in marathons!
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