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Ares Makes Over $1B in Investments in Sports, Media and Entertainment Sector

June 30, 2021, 08:10 AM
Filed Under: Private Equity News

Ares Management announced that funds managed by Ares have committed more than $1 billion of investments over the last six months in the sports, media and entertainment sector. Ares employs a global flexible private capital strategy that invests in both debt and equity investments, including senior debt, junior debt, preferred equity and minority equity while leveraging its relationships and capabilities across the Ares platform.

“We believe the strong secular demand for content in the sports, media and entertainment sector is driving the need for flexible capital,” said Mark Affolter, Partner and Co-Head of U.S. Direct Lending at Ares. “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,” said Jim Miller, Partner and Co-Head of U.S. Direct Lending at Ares. “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,” said Kort Schnabel, Partner and Co-Head of U.S. Direct Lending at Ares. “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 has recently completed in the sports, media and entertainment sector. These transactions reflect a mix of debt and equity and flexible 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 to 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 globally recognized racing team, primarily competing in the Formula One World Championship. McLaren Racing debuted at the Monaco Grand Prix in 1966 and is the only team in history to win motorsport’s Triple Crown: the Monaco Grand Prix, Indianapolis 500 and 24 Hours of Le Mans.

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 one of the fastest growing sports leagues and the #2 mixed martial art (MMA) company worldwide. PFL is the first and only in MMA with the sports season format where individual fighters compete in a regular season, playoffs, and championship.

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 leading baseball and softball brand worldwide. This investment supported Rawlings’s acquisition of Easton Diamond Sports, a leading developer and manufacturer of baseball and softball equipment with an over 40-year brand history in diamond sports. This transaction solidifies the combined company as a leading global brand and manufacturer of premium baseball and softball equipment, including bats, gloves, balls and protective gear.

Industry Leading Studio Equipment Rental Company
Ares entered into a senior secured credit facility in support of an industry-leading studio equipment rental business focused on film/television production, with deep relationships with blue-chip content producers. Proceeds were used, 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 premier, 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.

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