The San Antonio Spurs and the private equity firm CVC Capital Partners are in discussions for the Luxembourg-based investment manager to buy a minority stake in the team.
CVC Capital is seeking to purchase a limited partner stake from one of the existing minority owners, according to a person familiar with the negotiations. The Holt family, who controls the majority of the team, isn’t selling. The Spurs and CVC Capital declined to comment.
Only one institutional investor—Dyal Homecourt Partners—is approved by the NBA to purchase limited partner equity in a franchise. While the league has just established a framework under which other private equity money can participate in ownership, no other firm has been approved. It’s unclear then how long it may take for CVC’s desire to purchase equity to clear league hurdles. The talks were first reported by the Financial Times. Sportico was first to report the team was selling a stake.
The Spurs are in the top half of NBA team values, worth $2.05 billion, according to Sportico’s NBA team valuations unveiled in January. CVC Capital has $109 billion in assets under management from more than 300 investors, including pension funds, according to CVC’s website. Sports ownership is not new for CVC. The firm owns stakes in rugby’s English Premier League and the Pro 14 league, which has rugby teams stretching from Ireland to South Africa. It also is leading a bid to invest in Italy’s Serie A, it’s top-level soccer league.
Private equity finds sports attractive both because it’s one area where institutional investment has lagged and also because sports tends to be non-correlated with the moves of stocks and bonds, providing some risk protection.