Funds managed by Ares Management committed more than $1 billion of investments over the last six months in the sports, media and entertainment sector. Ares employs a private capital strategy that invests in both debt and equity investments, including senior debt, junior debt, preferred equity and minority equity.
“We believe the strong secular demand for content in the sports, media and entertainment sector is driving the need for flexible capital,” Mark Affolter, partner and co-head of U.S. direct lending at Ares, said. “We believe that one common theme across these investments is that the COVID-19 pandemic has accelerated an existing trend where companies in these markets are increasingly more open to innovative and institutional solutions. We expect this trend will continue.”
“Ares provides scalable capital solutions and invests across both debt and equity in the sports, media and entertainment sector,” Jim Miller, partner and co-head of U.S. direct lending at Ares, said. “In the past, sports franchises, leagues and clubs borrowed through traditional bank facilities, but there is now a growing need for more flexible capital to meet the needs for expansion. Ares seeks to use its significant capital base to provide innovative capital solutions to fulfill the sector’s growing funding gap.”
“We believe Ares is a compelling strategic partner for these companies due to our long-term, patient capital base that differentiates us from banks and other traditional capital providers,” Kort Schnabel, partner and co-head of U.S. direct lending at Ares, said. “We bring a collaborative and cross-functional approach to the investment process, which leverages our specialized expertise across a wide range of opportunities, geographies, assets and company types.”
Below is a description of selected transactions that Ares recently completed in the sports, media and entertainment sector. These transactions reflect a mix of debt and equity and structuring across geographies:
Atlético de Madrid – Ares acquired a minority stake in Atlético de Madrid through a structured preferred equity investment. This investment provided liquidity to existing owners and will support future growth initiatives, including development of the club’s surrounding stadium. Atlético de Madrid is a Spanish professional football club and a member of La Liga.
San Diego Padres – Ares served as the administrative agent and sole arranger for a senior secured credit facility to support the San Diego Padres’ refinancing of its existing capital structure and provide growth capital for the team. The San Diego Padres are one of 30 professional baseball organizations that compete in Major League Baseball and are a member of the National League West division.
Ottawa Senators – Ares served as the administrative agent and sole arranger for a second lien credit facility for the Ottawa Senators. The Ottawa Senators are one of 32 professional hockey organizations that compete in the National Hockey League.
McLaren Racing – Ares made a minority investment as part of a consortium led by MSP Sports Capital to help finance the McLaren Racing carveout from its parent company, McLaren Group. McLaren Racing is a racing team, primarily competing in the Formula One World Championship.
Rugby Australia – Ares served as the administrative agent and sole arranger for a senior secured credit facility to provide liquidity for Rugby Australia in the wake of the COVID-19 pandemic. Rugby Australia is the sport’s national governing body in Australia and is a member of World Rugby, Oceania Rugby and SANZAAR.
Professional Fighters League – Ares served as the administrative agent and sole arranger for a senior secured credit facility with equity participation to support the Professional Fighters League’s global growth plans. The Professional Fighters League (PFL) is the No. 2 mixed martial art (MMA) company worldwide.
Rawlings – Ares served as the administrative agent and sole arranger for a senior secured credit facility to support Rawlings’ acquisition of Easton Diamond Sports. Established in 1887, Rawlings is a baseball and softball brand. This investment supported Rawlings’s acquisition of Easton Diamond Sports, a developer and manufacturer of baseball and softball equipment with a more than 40-year brand history.
Studio Equipment Rental Company – Ares entered into a senior secured credit facility in support of a studio equipment rental business focused on film/television production, which used the proceeds, in part, to consummate two acquisitions, providing an expanded geographical presence across Canada and the U.S.
Meadowlark Media – Ares acquired a minority equity interest in Meadowlark Media to provide capital to support the company’s business and growth strategy. Meadowlark Media is a business-to-business company focused on supplying non-event, sports-related content through a variety of mediums. The company helps to facilitate content creation across multiple genres and subsequently sells its content to third party streaming and media platforms.
