The father-son duo who have built Matchroom Sport into a global sports promotion empire are plotting a deal that will strengthen their position among the UK’s super-rich.
Sky News can reveal that Barry and Eddie Hearn are in detailed talks with at least three private equity firms over the sale of a substantial minority stake in Matchroom, which was established 40 years ago.
KKR, CVC Capital Partners and Searchlight Capital are all said to want to partner with Matchroom by securing a deal, with a decision on a preferred bidder expected in the coming weeks.
Sources say talks are focused on a transaction that could value Essex-based Matchroom at between £600m and £700m, although the final figure could be outside that range. .
The size of the shares being sold by Hearns, and the structure of a deal, have also not been finalized, but if they proceed to deal with the 25% interest at the end of the likely range, it will deliver to them. a sum of £175 million.
However, the duo are said to have no intention of relinquishing control of Matchroom, which they have built into a powerhouse in the world of boxing and also have a significant presence in sports such as darts. and snooker.
Founded in its current guise in 1982, Matchroom dominated the management and promotion of snooker during its heyday, with huge TV audiences watching to watch stars like Steve Davis and Jimmy ‘Whirlwind’ White.
Over the next decade, it branched out into other sports, most notably boxing, and was responsible for staging the landmark fight between Frank Bruno and Joe Bugner at Tottenham Hotspur’s White Hart Lane. in 1987.
Since then, it has become one of the most important commercial fighters in the boxing world, promoting boxers including Anthony Joshua, Katie Taylor and Josh Warrington.
Last year, it struck a global deal with sports streaming platform DAZN, adding to the reported $1 billion in 2018 that saw DAZN agree to show its matches. Matchrooms in the US.
Matchroom continues to be affiliated with Sky – the direct parent company of Sky News – which is now focusing on the broadcaster covering the PDC World Darts Championship held annually at London’s Alexandra Palace. .
The Hearns company also has a presence, albeit less prominent, in sports including basketball, fishing, gymnastics, netball, billiards and tenpin bowling.
Reaching a deal to sell a stake in their empire would be an attractive return for Hearns, but it would also underline the continued boom in global sports-related assets even as operations continue to grow. Trading activity for much of the rest of the economy dried up due to recession fears.
In recent months, a group led by Todd Boehly, owner of the LA Dodgers and Clearlake Capital, has reached a record deal to buy Chelsea Football Club from sanctioned tycoon Roman Abramovich, for a record amount.
AC Milan, newly crowned Serie A champions, also changed hands with more than 1 billion euros – a record for a club in one of continental Europe’s major leagues.
Earlier this month, the television and streaming rights to cricket in the Indian Premier League were purchased for more than $6 billion in deals involving global media giants like Disney.
The huge sums that continue to be paid for sports rights reflect the ongoing international commercial appeal of elite sports in a time when other genres struggled to achieve meaningful growth. significance, especially among younger consumers.
Private equity firms have seized on the potential to acquire sports and related media properties to create new commercial formats that are more receptive to both fans and broadcasters.
CVC is the best example of this, winning stakes in leagues and teams in rugby, cricket and volleyball leagues.
It is also seeking a deal to unify the commercial rights to men’s and women’s tennis, and is likely to go head-to-head in an upcoming commercial rights auction for the ball’s premier league. German football, Bundesliga.
The company’s investment in Formula 1 racing, which it invested in 2016 through the sale of its remaining shares to Liberty Media Corporation, is generally considered one of the most profitable. in private equity history.
Silver Lake, the American acquirer, is also among those that have begun to invest heavily in the sports sector, including through a recently confirmed deal to buy a stake in the franchise. trade for the New Zealand All Blacks.
Searchlight, one of Matchroom’s other suitors, has a track record of backing major media companies, including through a recently announced deal for Gato Investments, one of the company’s portfolio companies. himself, to acquire Hemisphere Media Group, targeting Hispanic and Latino audiences in the US.
Meanwhile, a consortium led by KKR has captured the owner of the bicycle brand Raleigh, and KKR is also said to be among those interested in the Bundesliga deal.
Matchroom declined to comment on negotiations with private equity firms, while KKR, CVC and Searchlight also declined to comment.
This weekend, the identities of any other parties in the discussions with Hearns remain unclear.