Private equity looks to join margin traders at the football

Darren Sinden

Football sponsorship has been a major area of advertising spend among retail FX brokerages over recent years. Now the venture capitalists are moving in.

Margin trading has a love affair with football.

The shirts of leading teams across the UK and Europe are emblazoned with the logos of brokers large and small.

Additionally, advertising hoardings that surround the pitch carry additional branding and promotions in a year in which live sport has been hard hit, and those games which have been played, have largely been conducted behind closed doors.

Are the attractions of sponsorship waiting? Seemingly not.

Recently rebranded is the latest business to partner with a leading team becoming the official online trading partner of Manchester City one of the worlds most affluent clubs, and it is the global footprint of the beautiful game that attracts that kind of sponsorship.

Matches from Europe’s top leagues, led by the English premiership are broadcast around the globe to audiences that number into the tens of millions.

For example games from the premier league are broadcast in 212 territories, are accessible in some 643 million households, which contain an addressable audience of some 4.3 billion individuals.

Top clubs from the premier league also get the chance to compete against their peers in Europe, in the UEFA champions league, another competition that regularly produces TV audiences in 8 figures throughout the season.

It’s interesting to note then that private equity is starting to take an interest in the game as well with Italy’s Seria A considering the sale the sale of a stake in its media business to a consortium led by CVC Capital.

The deal which is for 10% of the media business has a price tag of around $2.0 billion or €1.70 billion could conclude before the end of the year following  a unanimous vote in favour of it by all 20 Seria A clubs last week.

The private equity buyers have guaranteed to retain their stake for at least six years according to sources quoted by Reuters.

For their part, the private equity group will look to streamline business and increase media exposure for the Italian league and its clubs on both a domestic and global stage.

The first part of which will be new broadcast rights deals for next season CVC has a history of investing in sport most notably in Formula 1 but also in rugby in both the UK and Europe at a club and potentially international level.

CVC and its partners will no doubt be looking to the English premier league and its highly lucrative TV deals as a benchmark for its interest in Seria.

Sport, particularly football, has become big business and private equity involvement in it is likely to drive both the visibility and the size of that business further. That will be music to many ears within marketing departments across Europe and beyond.

However, we may find that when sponsorship deals come up for renewal in future seasons the cost of entry will have risen substantially.

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