Saudi Arabia’s Hunt For Cheap Sports Assets

Cash is king, especially at a time when sports properties are being hammered by the pandemic. And if there’s one thing Saudi Arabia’s wealth fund has, led by Crown Prince Mohammed bin Salman, is plenty of cash, which is why their sovereign investment fund is on the hunt for various sports assets.

Two months ago, it was reported that the Public Investment Fund, Saudi Arabia’s sovereign-wealth fund, purchased a large stake in Live Nation
LYV
 Entertainment, the world’s largest live-entertainment company. Public Investment disclosed that it owned a 5.7% stake in the company, a total of 12.3 million shares valued at approximately $500 million. Public Investment is now Live Nation’s third-largest shareholder; Liberty Media
FWONK
, which owns a 33% stake, is the largest.

Recently trading at $43, Live Nation’s stock price is 44% below their 52-week high. The company is suffering from canceled concerts and offering people who had bought tickets credit for future shows at 150% of the value of their original tickets.

Soccer teams are also ripe for the picking. For months now, Saudi Arabia’s Public Investment Fund has been trying to close the deal to buy the English soccer team Newcastle United for £300 million ($375 million). Newcastle United is in England’s Premier League
PINC
, which faces an aggregate revenue loss of £500m ($615 million) because of the coronavirus pandemic. Last season, Newcastle United posted revenue of £176m ($216 million), so the fund would be paying just 1.7 times last year’s revenue for the team.

A little over a month ago, it was reported that Saudi Arabia’s public investment fund was looking to buy the French soccer team Olympique de Marseille, which competes in France’s Lique 1, for €250 million ($280 million). Yesterday, the team’s president, Jacques-Henri Eyraud, was quoted as saying the team is not for sale.  But how knows how long owner Frank McCourt wants to hang on. For the 20-18-19 season, Marseille lost €91.5 million (US$101 million) and the team is potentially facing sanctions from Uefa if they fail to meet the financial targets set last June in an agreement with the European soccer governing body’s Club Financial Control Body (CFCB). French soccer is also struggling due to the pandemic. In early May it was reported that the 40 clubs in Ligue 1 and Ligue 2 agreed to ask for a state-guaranteed loan, believed to be worth as much as 225 million euros ($246m), to compensate for lost television income.

Soccer’s television rights are also suffering. A week ago it was reported that Germany’s Bundesliga will on Monday award domestic broadcast rights for the four seasons from 2021-22, with the value likely to decline from the previous agreement. The German Football League said that the new four-season contract for 2021-25 was worth about 4.4 billion euros ($4.95 billion) over four years, down slightly from the 4.64 billion ($5.22 billion) in the previous deal.

With the value of the Bundesliga’s rights apparently depressed, guess who is interested in buying? That’s right, the Saudi’s. The body that runs German football’s top division is in exclusive talks with beIN Sports to renew the Qatar-based network’s $250m five-year deal to screen matches across the region, which runs out at the end of this season.Earlier this week it was reported that Saudi Arabia has approached Germany’s Bundesliga over acquiring the football league’s television rights in the Middle East.

My money’s with the Saudi’s.