Private Equity Faces Uphill Battle in Italian Soccer Pursuit

(Bloomberg) -- Italy’s divided soccer league is set to meet this week to debate whether private equity has the answer to its woes.

The top suitor, a group backed by CVC Capital Partners and Advent International Corp., is increasingly concerned it hasn’t won enough support from Serie A clubs, people with knowledge of the matter said. Its bid is among proposals that will be discussed at a Sept. 9 meeting of the top Italian teams, the people said, asking not to be identified because the information is private.

While Serie A management supports the idea of raising capital from private equity funds, several clubs, including S.S. Lazio and S.S.C. Napoli, have expressed reservations about the approach during the past few weeks of discussions, the people said. At least 14 of the league’s 20 teams need to vote in favor for an offer to be accepted, the people said.

It’s possible the league may not make a final decision at this week’s meeting, and deliberations could drag on longer, the people said. Representatives for Advent, CVC and Serie A declined to comment. Representatives for Lazio and Napoli didn’t respond to email requests for comment.

CVC and Advent offered about 1.6 billion euros ($1.9 billion) for a 10% stake in a new media company with the rights to broadcast Serie A games, people with knowledge of the matter have said. They partnered with Italy’s FSI fund for their bid, according to the people. The consortium is competing with Bain Capital, which submitted a lower bid, the people said.

Investment firms Three Hills Capital Partners and Apax Partners are also working on a proposal to provide fresh capital to the Italian league and have asked for more time to finesse their late bid, Bloomberg News has reported.

While the Italian league needs an injection of cash after decades of underinvestment, Serie A would be selling a stake at a time when valuations have been knocked down by Covid-19. The coronavirus pandemic forced a halt to games in March. Play was later resumed, with teams competing in stadiums without fans. A new season is scheduled to begin later this month.

The discussions come as Serie A tries to increase its revenues to levels closer to those of England’s Premier League and Spain’s La Liga. Serie A generated revenue of about 2.5 billion euros ($3 billion) in 2018-2019, with almost 60% coming from broadcasting, according to a June report from Deloitte.

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