Italy’s Serie A draws private equity interest for media rights stake

Italy’s top football league has started talks with private equity firms over the sale of a stake in its media rights business as it considers options to secure funding.

Serie A is working with advisers at Lazard on a possible deal, according to people familiar with the details.

Private equity owners may look to purchase around a 10 to 20 per cent stake in the league’s media rights that could net Serie A a multibillion-euro investment, one of the people said.

That process comes alongside a separate series of negotiations. Two other people close to the talks said Serie A would first negotiate with broadcasters a five-year media rights contract starting from 2024.

Talks with the private equity firms will only move forward if the clubs fail to agree on a price with media companies such as Sky and DAZN, the people said.

A deadline for broadcasters to turn in their bids will expire next week. People close to Serie A expect the bids to be below the clubs’ asking target and anticipate that negotiations over price will extend into July.

“It’s early days but we hope to ultimately find an agreement on price with the broadcasters,” said the owner of one of the football clubs. “In which case we won’t need additional funds.”

Only if those talks fail will Serie A begin exploring other options, the people said.

A group of investment firms is expected to be among the interested parties in a media rights stake sale and discussions have begun with at least one lender that would help finance any deal, some of the people said. 

Italian football clubs have long been reluctant to give up ownership of their media rights. An attempt led by private equity firm CVC to buy a minority stake in the media rights business for €1.6bn was rejected by the clubs in 2021.

Any deal is likely to be fraught with complications, despite continued interest in sports media rights from financial investors. 

Serie A has held talks with private equity firms on multiple occasions before but opposition from individual clubs and their executives derailed negotiations. 

In an interview last year, Serie A president Lorenzo Casini said investments in football infrastructure, such as stadiums, by foreign investors snapping up Italian clubs could also benefit the value of the league’s media rights, particularly outside Italy.

An initial bid by CVC at the end of 2020 also envisaged the construction and upkeep of stadiums across Italy through a new infrastructure fund, as well as a 20 per cent stake in the media business.

The Italian league, however, remains in dire need of fresh funds as its revenues continue to trail significantly behind other main European leagues such as England’s Premier League and Germany’s Bundesliga.

The Bundesliga last month rejected an offer to sell a stake in the league’s media and commercial rights to private equity firms. Although most clubs voted in favour of the offer, the outcome fell short of the required two-thirds majority ultimately derailing the funds’ second attempt to buy a stake in the German football league’s coveted media business.

Other European leagues such as La Liga in Spain and France’s Ligue 1 have clinched media rights deals with private equity firms after the pandemic hit their revenues.

Serie A and Lazard declined to comment.