Private equity giant Ares Management has put more than $1 billion in investments into sports properties the past six months, including taking stakes in McLaren Racing and Atlético de Madrid while also providing a senior secured credit line to the San Diego Padres.
Ares said in a press release this morning that the investments include taking minority equity or preferred equity in organizations and providing debt financing to teams, sports-related businesses and media properties. The Los Angeles-based firm is led by co-founders Tony Ressler, owner of the NBA’s Atlanta Hawks, and Bennett Rosenthal, an owner of Major League Soccer franchise LAFC.
The asset manager disclosed nine investments in sports, including taking preferred equity in Madrid, which competes in Spain’s top-level La Liga soccer league. The money Ares paid for its minority stake will go in part to develop the property surrounding the stadium. Ares also disclosed it is a minority investor in an MSP Sports Capital Group investment into Formula One’s McLaren Racing. In January, MSP invested as much as $300 million into McLaren. F1 is seeing increasing values thanks to spending caps instituted by Liberty Media Corp., the business that owns Formula One. The Ares disclosure also included the previously reported equity stake the firm took in Meadowlark Media, the effort by former ESPN staffers John Skipper and Dan Le Batard to provide sports-related content.
“We believe the strong secular demand for content in the sports, media and entertainment sector is driving the need for flexible capital,” Mark Affolter, co-head of U.S. direct lending at Ares, said in the release. “We believe that one common theme across these investments is that the COVID-19 pandemic has accelerated an existing trend where companies in these markets are increasingly more open to innovative and institutional solutions. We expect this trend will continue.”
In addition to providing debt financing for MLB’s Padres, Ares also arranged debt financing for hockey’s Ottawa Senators, Professional Fighters League, Rugby Australia, and baseball and softball gear maker Rawlings as part of its acquisition of Easton Diamond. Ares, which has $227 billion in assets under management, also said it provided a senior secured credit facility to a television studio equipment rental business in North America it didn’t name. That business used the funding in part to close two acquisitions. Typically, senior credit facilities have superior rights and claims on assets compared to junior debt and equity if a company faces financial troubles.